complete the acquisition as required by the merger agreement. The standalone value of Rohm’s share price is currently at $46.77 while the synergies could almost double that to $94.63 per share. By going ahead with the deal Dow would need to raise capital and that might lead to a lower bond rating. 1. Why does Dow want to buy Rohm and Haas? Dow believes the acquisition of Rohm and Haas would be a defining step in their transformational strategy to shape the “Dow of Tomorrow”. The acquisition
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expiring patented medications which are and soon will be facing market competition from generics, and fewer that optimal products in the development stage to be brought to market. Additionally, some European countries, in an effort to reduce and curtail costs as they are coping with the effects of austerity measures, are imposing a mandatory switch to generic drugs. Some disappointing results of new products in the development stage are posing a risk to the company that needs to stay in compliance, particularly
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1 The Value of Synergy Aswath Damodaran Stern School of Business October 2005 2 The Value of Synergy Many acquisitions and some large strategic investments are often justified with the argument that they will create synergy. In this paper, we consider the various sources of synergy and categorize them into operating and financial synergies. We then examine how best to value synergy in any investment and how sensitive this value is to different assumptions. We also look at how this synergy
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general and the hospitality sector in particular Internal: managing the elements of working capital to free resources; internally generated funds; retained profits External: short-, medium- and long term; caring; risk and reward Cost of capital: equity and loan capital costs; weighted average cost computations Systems: the main features of income and corporation tax; schedules; rates; personal and capital allowances; tax credits and debits UNIT 11: RESOURCE MANAGEMENT IN HOSPITALITY LO3 Understand
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of cost savings * Deal structure * Contingent payment analysis * Acquisition cost * Recommendation Benefits of the Acquisition * Accelerate sales and earnings growth by acquiring Pillsbury > Product Innovation > International Expansion > Channel Expansion > Productivity Gains * Combined product portfolio would be more balanced * Combined firm would rank 5th in size among competitors based on food sales * Cost savings
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company invests in projects with a positive NPV and a irr higher then the set hurdle rate - relative to market interest rates, project risk, and estimates . then this is consistent with its strategy of growth • Optimize the use of debt in the capital structure. o by focusing on its ability to service its debt. The lower they can bring their debt percentage their value will increase and is consistent with its strategy of growth • Repurchase undervalued shares o Buys backs
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1996 11. ServerVault: ‘‘Reliable, Secure, and Wicked Fast’’ III. Estimating the Cost of Capital 12. ‘‘Best Practices’’ in Estimating the Cost of Capital: Survey and Synthesis 15. Teletech Corporation, 1996 IV. Capital Budgeting and Resource Allocation 19. Diamond Chemicals PLC (A): The Merseyside Project 20. Diamond Chemicals PLC (B): Merseyside and Rotterdam Projects VI. Management of the Corporate Capital Structure 29. Structuring Corporate Financial Policy 31. Polaroid Corporation
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How to Calculate the WACC From a Balance Sheet | eHow.com Page 1 of 2 Print Article Discover the expert in you. How to Calculate the WACC From a Balance Sheet By Morgan Adams, eHow Contributor Weighted average cost of capital (WACC) is a calculation of a company's cost of capital, or the minimum that a company must earn to satisfy all debts and support all assets. The calculation includes the company's debt and equity ratios, as well as all long-term debt. Companies usually do an internal
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| |Did Circon’s poison pill represent a strong or weak barrier to a hostile takeover? Specifically, if a hostile bidder had “broken through” (or| |triggered) the poison pill, what precisely would have happened to Circon’s capital structure and the hostile bidder’s stake in the company? | |(To answer this question see especially Footnote 1 on pages 4 and 5 and Exhibit 2 of the case.) | |Put yourself in the shoes of Charles Elson
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The goals of MNCs: maximizing the value of the MNCs and shareholder wealth. 2. Agency problems 1) Agency problems: The conflict of goals between a firm’s managers and shareholders is often referred to as the agency problem. 2) Agency costs are normally larger than for purely domestic firms for several reasons (1) MNCs with subsidiaries scattered around the world may experience larger agency problems because monitoring managers of distant subsidiaries in foreign countries is more
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