1. In the abstract, what is Blanka Dobrynin hoping to accomplish through her active-investor strategy? Blanka Dobrynin is an activist investor that focuses on distressed companies, merger arbitrage, change of control transactions and recapitalizations. For recapitalizations she looks for inefficiencies in companies’ capital structure and gains returns through restructuring them with more efficient methods. She seeks firms that are stable and that have relatively low risk and little to no debt. She then uses the benefits of leverage, which provides more financial flexibility, a tax shield, and in some cases a higher market capitalization. 2. What is your estimate on Wrigley’s WACC now (case content; also see Exhibit 5 and 7)? If Wrigley issues
This case is about Star River and how the firm is in the middle of financial crisis that was induced by rapid growth. The CEO basically wants to improve the financial health of the company and ask for help to make some decisions. The CEO asks one of the analyst for help in reviewing the historical performance of the firm, forecast financing requirements for the next two years, exercise the forecasting model to identify the key drivers of the assumptions, estimate Star River’s weighted-average cost of capital and lastly to analyze the proposed investment in a packaging machine.
My conclusion is that the protagonist should buy more stock of Costco Wholesale Corporation as she concluded the company is growing at manageable rate without relying on debt or equity. They are with high sales or profit, low labor costs, and consistent growth. Costco seems to be a low risk stock that is performing well with long term stability for more
The company, General Mills, for which I was assigned, proved to be a worthwhile investment researching since it contains a large portion of the market share of its “niche,” that being breakfast cereals and the like. In conducting the research necessary to find out if a potential investor might strike interest upon General Mills, we find out a myriad of things. By drawing our attention towards the spreadsheet, which contains the bits of information we need to infer conclusions, we can see the patterns that develop over a 5 or 10 year period involving such things as: stock price, EPS, ROI, and many others. The following will give some insight into the history of General Mills among other things.
In assessing Du Pont’s capital structure after the Conoco merger that significantly increased the company’s debt to equity ratio, an analyst must look at all benefits and drawbacks of a high debt ratio. The main reason why Du Pont ended up with a high debt to equity ratio after acquiring Conoco was due to the timing and price at which they bought Conoco. Du Pont ended up buying the firm at its peak, just before coal and oil prices started to fall and at a time when economic recession hurt the chemical industry of Du Pont. The additional response from analysts and Du Pont stockholders also forced Du Pont to think twice about their new expansion. The thought of bringing the debt ratio back to 25% was brought on by the fact that the company saw that high levels of capital spending were vital to the success of the firm and that high debt levels may put them at higher risk for defaulting.
Bowman, E. H. & Singh, H. (1993) ‘Corporate Restructuring: Reconfiguring the Firm’, Strategic Management Journal, 14, pp. 5-14 Retrieved July 7, 2010 from JSTOR's Website.
The recent trend of selling stock but attaching limited voting rights is being followed by Canada Goose. Investors should, therefore, examine carefully the voting rights of the stocks retained by Bain in comparison to the voting rights of their stock purchase. It is under Bain Capital management that Canada Goose has racked up $278 million in debt and this position limits its growth prospects. The IPO funds raised have been earmarked to be used to pay this debt. While necessary, it is not a good start for a company that wants to
Gaughan, P. A. (1996). Mergers, acquisitions, and corporate restructurings. New York: John Wiley & Sons.
(Central time). Further, the matter is set for trial on January 7, 2019. If the case does not settle at the upcoming pretrial conference, there are four Lend Lease witnesses that must be deposed along with wage loss witnesses, family/damage witnesses and several treating physicians. The parties would then progress to expert witnesses. In the event Lend Lease settles the case and Midwest waives its liens, we expect Lend Lease will pursue its contribution claim against Cives. Therefore, we would need to depose Lend Lease’s witnesses and then proceed to expert discovery to prepare for trial starting on January 7,
This was known to be the largest racial discrimination case that settled. They settled at $156 million; “The settlement also mandates that the company make sweeping changes, costing an additional $36 million, and grants broad monitoring powers to a panel of outsiders -- an unusual concession in employment discrimination cases” (Winter,
The Body Shop International case is an interesting case study into the miscommunication of owners and stockholder interests with regard to financial conditions. Anita Roddick, the founder of The Body Shop had no financial experience and thought that all she needed to do was expand her business and the financing would take shape as she developed her business. While Anita’s product concept of a natural skin-care line was good; her lack of experience in financial matters took its toll on her business.
... Rajaratnam hedge-fund Galleon Group. The group had over $1.5 billion dollars invested with many Sri Lankan companies (Ondaatjie, 2009). Once Rajaratnam was indicted many investors decided to pull their funds out of Galleon Group. This created chain reactions that led to all investors pulling their money from the hedge fund. Millions had to be removed from Sri Lanka to pay back its investors. This left many Sri Lankan companies with little cash on hand to continue operation and expansions.
The ACWL after four years – progress report by the Management Board. Oct 2005, .
... sacrificed for growth which may lead to a takeover or selling of their shares.
Bodie, Z., Kane, A., & Marcus, A. J. (2011). Investments. (9th ed.). New York, NY: McGraw-Hill/Irwin.
On July 29, 2011, Martinrea acquired Honsel AG, a leading German supplier for aluminum auto components that was facing significant liquidity issues. Martinrea purchased 55% of the assets of the company, while Anchorage LLC, a private investment firm, acquired the remaining 45%. This transaction helps Martinrea with their aluminum market share, broadens segmented earnings,...