...MAHIDOL UNIVERSITY COLLEGE OF MANAGEMENT Case in Finance “ Crown Corporation ” Group Member: FN15C ไทธัม พัฒนภูมิไท 5550417 ลวิตร ฐกัดกุล 5550423 วรวรรณ ศรีศักดิ์ 5550425 สมชาย กองเกตุใหญ่ 5550427 อดิสัน กันชาติ 5550430 Company’s Background ปี 1960 Crown Corporation ได้เปลี่ยนธุรกิจจากบริษัทเหมืองแร่เป็นผู้รับผลิต superally สำหรับชิ้นส่วนของอากาศยานและผู้ผลิตอลูมิเนียมอย่างครบวงจร เพื่อใช้สำหรับบรรจุภัณฑ์ชนิดต่างๆ โดยเมื่อปี 1966 ได้เข้าซื้อโรงงานโลหะที่ประเทศอเมริกาชื่อว่า Intalco ภายหลังจากการเข้าซื้อกิจการดังกล่าวทำให้ Crown มีส่วนแบ่งทางการตลาดเพิ่มขึ้นเป็น 81% และในเวลาต่อมาในปี 1967 จึงตัดสินใจที่จะสร้างโรงงานอลูมิเนียมแห่งที่สองภายใต้ชื่อ Eastalco ซึ่งสามารถเพิ่มรายได้ราว 3-4 ล้านดอลลาร์ และจากสภาวการณ์ที่ภาคอุตสาหกรรมมีการแข่งขันสูงทำให้ Crown ต้องเติบโตและต้องมีกำลังการผลิตที่สูงขึ้นเพื่อครองการเป็นเจ้าของตลาดจนในปี 1969 ทางบริษัทจึงพิจารณาแหล่งจัดหาเงินทุน เพื่อเพิ่มผลผลิตอลูมิเนียมที่ต้องใช้เงินทุนจำนวนมหาศาล สำหรับเป็นเงินหมุนเวียนและขยายกิจการให้ใหญ่ขึ้นและการวางแผนทางการเงินในระยะยาวโดยไม่กระทบกับการจ่ายเงินปันผลของบริษัท การวิเคราะห์สถานการณ์ในปัจจุบัน จุดแข็ง-จุดอ่อน, Five Forces Model และความสามารถในการแข่งขันด้านอื่นๆ ในอุตสาหกรรมไม่ว่าจะเป็นบริษัทขนาดเล็กหรือขนาดกลาง ล้วนแต่มีการเสนอราคาต่ำกว่าคู่แข่งจึงเกิดการแข่งขันอย่างรุนแรงด้านราคาของสินค้า โดยในแต่ละบริษัทต่างแข่งขันด้านการดำเนินการทุกอย่างเพื่อให้การผลิตสินค้ามีต้นทุนต่ำที่สุด ส่งผลให้ราคาของสินค้าลดลงโดยเฉลี่ยประมาณ 20% ในระหว่างปี 1961 จนถึงช่วงปลายปี...
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...Case 41, MoGen, Inc. – Finance 675 David Biggs, Amanda McAllaster, Jake Unruh, Andy Rao Background Information MoGen is a leading company in the recently surging biotechnology industry that specializes in human therapeutic drugs that help offset the damaging effects of chemotherapy for cancer patients. The business model for all biotech companies is fairly similar: through extensive R&D, create new medical drugs, obtain FDA approval and product patents and launch them into the market. In order to achieve profitability and increase the likelihood of FDA approval for their various projects, MoGen must ensure a consistent supply of cash to fund R&D efforts and maintain financial flexibility in the face of the high levels of uncertainty that the industry as a whole faces. The biotech industry is truly what one would describe as a high-risk, high-reward venture. Because Mogen and the rest of the industry faces strict and rigorous standards set by the FDA, projects often fail or have extremely long lead-times, making investments riskier and additional compensation a must compared to most other industries. Many research efforts lead to failed projects due to FDA rejection and other projects face the threat of “biosimilars,” which are essentially copies of the drugs, once the product reaches the end of the patent-protection period. At the time, MoGen had several drugs that faced the threat of biosimilar competition in Europe, all due to patent expiration...
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...FIN 6310 Case Studies Purchase Case Studies (4) • Harvard Case Studies (2) o Courses available at o https://cb.hbsp.harvard.edu/cbmp/access/18322840 • Ivey Case Studies (2) o Register for an account at Ivey Cases https://www.iveycases.com/RegisterUser.aspx o Put the following two cases studies in your cart. Make sure Digital Download is selected which will cost $3.40 per case. o Burgundy Asset Management: The Wescast Investment Decision https://www.iveycases.com/ProductView.aspx?id=31479 o Valuing Wal-mart 2010 https://www.iveycases.com/ProductView.aspx?id=48332 o Download the Wal-mart case spreadsheet for free. o Valuing Wal-mart 2010 – Spreadsheet for students https://www.iveycases.com/ProductView.aspx?id=52705 Case Report Guidelines 1. Place case title at top of first page with team member names (maximum four members per team). 2. Answer questions in numerical order. 3. Include graphs and tables if appropriate. 4. Print out case report and hand-in at the beginning of class. Harvard Management Company (2001) Questions 1. Is HMC’s recent payout policy consistent with the goal of preserving the real (adjusted for Harvard’s expense growth) value of the endowment and its distribution into perpetuity? 2. Could payout be raised to meet recent budget pressures without changing the risk-return profile of the portfolio? 3. What value has the HMC’s policy portfolio...
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...Table of Content Executive Summary 3 1. Introduction 4 1.1 Overview of Harvey Norman Holding Limited 4 1.2 Major Competitor 5 1.2.1 JB Hi-Fi 5 1.2.2 Woolworth 5 2. Capital Structures 6 2.1 Types of Funding 6 2.2 Recent Trends of Leverage 7 2.3 Comparison of capital structure with similar companies 9 2.4 Capital expenditures and its financing 10 2.5 Important factors influencing the use of debt financing 10 2.5.1 Tax Advantage 10 2.5.2 Corporate Tax Rate 11 2.5.3 Credit rating 11 2.5.4 Interest rate 11 2.5.5 Company’s Industry 12 2.5.6 Company’s growth rate 12 2.5.7 Some other arguments about Harvey Norman 12 2.6 Evidence of financial distress 13 2.7 Optimal Capital Structure 14 3. Dividend Policy 15 3.1 HVN’s Dividend history 15 3.2 Competitors Dividend Analysis 16 3.2.1 David Jones Limited (DJS) 16 3.2.2 JB HI-FI Limited (JBH) 17 3.2.3 Comparison 17 3.3 Alternatives of Paying Dividends 18 3.4 Company’s Characteristics 19 3.5 Optimal Dividend Policy 19 4. Valuation 20 4.1 Methodology of valuation 20 4.2 Operating revenue estimation and Future free cash-flow 20 4.2.1 Performance of HVN: 20 4.2.2 Future prospects: 22 4.2.3 Operating Revenue Forecasting: 22 4.2.4 Free cash flow: 25 4.3 Weighted Average Cost of Capital (WACC) 25 4.3.1 Value of Debt and cost of debt: 25 4.3.2 Value...
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...Advanced Corporate Finance Marriott Case 1.The WACC for Marriot Corp is 10.68% if taken alone. Another way would be to use the standardized weights of all the other divisions lodging,restaurant and contract services WACC . This gives us a WACC of 10.21% for the Entire Entity. a.The risk free rate used was 4.58% (Long Term Us Government Bond Returns 1926-1987) as these represent an asset of similar risk and longevity(Lodging can be considered to be a long term business).The Market Risk used was the S&P 500 composite(1926-1987) which was 12.01% .The risk premium in this case turned out to be Market Risk-Risk Free = 7.43% 2. If they are opening a new restaurant or lodging facility one can use Mariotts WACC to decide whether to go ahead with the project proposal or not. 3.Lodging Division WACC = 9.17% , Restaurant Division WACC=11.83% a.For all the divisions the risk free rate used was 4.58% (Long Term Us Government Bond Returns 1926-1987) as these represent an asset of similar risk and longevity.The market risk and market risk premium used for all cases was the S&P index 12.01% and 7.43% respectively. b.Cost of Debt : Marriot Marriott =8.95%(Debt Equivalent 30 Yr Maturity) + 1.3% (Premium)=10.25% Lodging =8.95%(Debt Equivalent 30 Yr Maturity) + 1.1% (Premium)=10.05% Marriott and Lodging were considered to long term business with a shelf life of 30 years Lodging =8.72%(Debt Equivalent 10 Yr Maturity) + 1.4% (Premium)=10.35% Contract =8.72%(Debt Equivalent...
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...Question 3: Create a financial analysis of Santiago’s choices and use it to make a recommend a solution to his problem. - Phân tích trường hợp cần USD của ông Santiago: Ông Santiago là một người kinh doanh dược phẩm, công việc của ông yêu cầu một nguồn cung đô la lớn để thanh toán các đơn đặt hàng. Tuy nhiên trong thời gian Tổng thống Venezuela Hugo Chavez cầm quyền và đưa ra các chính sách thay đổi trên các lĩnh vực kinh tế, tài chính cụ thể là kiểm soát vốn làm những người kinh doanh như ông Santiago khó có thể tiếp cận được nguồn đô la cần thiết. Ông Santiago đã tham gia kêu gọi phản đối Tổng thống Chávez do đó bị CADIVI không cho phép hoán đổi đồng Bolivar (đồng tiền của Venezuela) thành Đôla. Trong khi đó, Santiago có một hợp đồng phải thanh toán 30.000 đôla Mỹ các sản phẩm dược từ các nhà cung cấp Mỹ. Do không mua được Đô la từ CADIVI ông đã buộc phải tìm kiếm nhiều các nguồn thay thế nhằm thực hiện nghĩa vụ thanh toán bằng đồng Đô la của mình, mặc dù các cách thức này tốn kém hơn và không hợp pháp. Kể từ khi chính sách kiểm soát vốn được ban hành, việc tìm kiếm mua bán đồng đô la đã trở thành hoạt động hàng tuần của Santiago. Ngoài con đường chính thống mua bán đồng đô la qua CADIVI, Santiago còn có thể mua bán đồng đôla thông qua thị trường chợ đen và thị trường xám với mức giá cao và chứa đựng nhiều nguy hiểm tiềm ẩn. - Ngày 10.03.2004, Santiago đã nhận được CADIVI cho phép mua 10.000 đô la với tỷ giá chính thức Bs1920/USD, đồng thời Santiago sẽ phải trả cho CADIVI...
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...Corporate Finances Case Study Negative Cash Flow This is the phenomenon most common with the business when they experience several expenditures that surpass the earnings of the business thus resulting into a deficit in meeting some of the business financial obligations. This situation is most common with the business in the first and second years (Ross, Westerfield & Jordan, 2011). When the situation arises, some businesses will resort to loans and equity financing as a way of mitigating the crisis of the business. With view of the Mason Corporation, a prognosis can be done to see into it that the business will be in a financial crisis given the financial trend observed. In this case, the business has to take some precautionary measures to cushion the business form such financial meltdown. In a business, it does not matter the amount of profit your company is making in a day, a month or quarterly, the most important thing to ensure is the continuity of the cash flow of the business. In this case a cash flow forecast is important and an integral part of any business successes. Without doing the forecast, one is destined to have problems in paying suppliers as well as meeting the basic business financial obligation and this will results into failure of the business to operate (Ross, Westerfield & Jordan, 2011). In this regard based on the information of the cash flow of the business, there are several options open for the business to evade the financial crisis. There are...
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...Chapter 1 ------------------------------------------------- An Overview of Corporate Finance and ------------------------------------------------- The Financial Environment MINI CASE ------------------------------------------------- Assume that you recently graduated with a degree in finance and have just reported to work as an investment advisor at the brokerage firm of Balik and Kiefer Inc. One of the firm’s clients is Michelle Dellatorre, a professional tennis player who has just come to the United States from Chile. Dellatorre is a highly ranked tennis player who would like to start a company to produce and market apparel that she designs. She also expects to invest substantial amounts of money through Balik and Kiefer. Dellatorre is also very bright, and, therefore, she would like to understand, in general terms, what will happen to her money. Your boss has developed the following set of questions which you must ask and answer to explain the U.S. financial system to Dellatorre. ------------------------------------------------- a. Why is corporate finance important to all managers? Answer: Corporate finance provides the skills managers need to: (1) identify and select the corporate strategies and individual projects that add value to their firm; and (2) forecast the funding requirements of their company, and devise strategies for acquiring those funds. ------------------------------------------------- ...
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...1. What is the most important thing that you can do when saving money? Financial Expert Michelle Singletary believes that putting money aside each week is key to a successful budget. 2. What is a subsidized loan? There is generally no interest until the loan is due. 3. What are some of the financial challenges that individuals face when they first live on their own? They do not put their money where it needs to go. They need money for rent and groceries. They buy extra stuff like $6 coffee. They have toi be able to have enough money to pay their bills and take care of themselves first. 4. How can you prepare to manage your money on your own? You can keep everything that is important and you also need to budget each week. You should keep important...
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...This report will present a discussion on the financial challenges and issues based on the Ruritanian Project case study. The report is concerned with analyzing the investment environment of the host nation, maximizing the investment return and minimizing the risks which could have a negative impact on the financial performance of the Ruritanian project. Firstly, the national economy environment will be discussed based on the national GDP growth and inflation rate; secondly, there is a discussion on the foreign exchange risks of Rutitania Crown against international currency; third, the issue of joining the Euro zone will be analyzed in terms of benefits and drawbacks; next, the taxation effect in the investment decision making will be accessed and finally there will be a discussion on the political environment. THE NATIONAL ECONOMY AND THE IMPLICATIONS FOR THE PROJECT 2.1 The Relationship between National Economy and the Foreign Direct Investment (FDI) The economic growth of the host nation has always had a positive relationship with the foreign direct investment decision making. The positive effect of host country economic growth on investment decision making has been supported by various studies (Ericsson and Irandoust, 2000; Dhakal, Kamal and Upadhyaya, 2007; Barrell and Pain, 1996; Grosse and Trevino, 1996; Taylor and Sarno, 1999; Trevino et al., 2002). Traditionally the economic growth of the host nation induces FDI inflow when FDI is seeking consumer markets, or when...
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...MBA Program Course: Financial Analysis and Decision Making MBA730 Instructor: Marlena L. Akhbari Wright State University Finance and Financial Services McGraw-Hill/Irwin =>? McGraw−Hill Primis ISBN: 0−390−42334−3 Text: Case Studies in Finance: Managing for Corporate Value Creation, 4/e Bruner This book was printed on recycled paper. MBA Program http://www.mhhe.com/primis/online/ Copyright ©2003 by The McGraw−Hill Companies, Inc. All rights reserved. Printed in the United States of America. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without prior written permission of the publisher. This McGraw−Hill Primis text may include materials submitted to McGraw−Hill for publication by the instructor of this course. The instructor is solely responsible for the editorial content of such materials. 111 MBAP ISBN: 0−390−42334−3 MBA Program Contents Bruner • Case Studies in Finance: Managing for Corporate Value Creation, 4/e II. Financial Analysis and Forecasting 1 1 6 16 16 39 52 52 60 66 66 84 100 100 6. The Financial Detective, 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...
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...Chapter 1 An Overview of Corporate Finance and The Financial Environment MINI CASE Assume that you recently graduated with a degree in finance and have just reported to work as an investment advisor at the brokerage firm of Balik and Kiefer Inc. One of the firm’s clients is Michelle Dellatorre, a professional tennis player who has just come to the United States from Chile. Dellatorre is a highly ranked tennis player who would like to start a company to produce and market apparel that she designs. She also expects to invest substantial amounts of money through Balik and Kiefer. Dellatorre is also very bright, and, therefore, she would like to understand, in general terms, what will happen to her money. Your boss has developed the following set of questions which you must ask and answer to explain the U.S. financial system to Dellatorre. a. Why is corporate finance important to all managers? Answer: Corporate finance provides the skills managers need to: (1) identify and select the corporate strategies and individual projects that add value to their firm; and (2) forecast the funding requirements of their company, and devise strategies for acquiring those funds. b. Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form. Answer: The three main forms of business organization are (1) sole proprietorships, (2) partnerships, and (3) corporations. In...
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...Case 3: Marriot Corporation Marriot公司的投資方案評估運用的是現金流量折現法並計算其相對應的目標率(Hurdle rate)，我們以其WACC做為目標率，先預估總體的WACC，又因公司旗下擁有三個事業部：lodging, restaurant 和contract services，因此我們將分別計算三個不同事業部門的WACC數值以方便公司未來應用於其投資方案的決策。 1.求出 Marriot Corporation整體之 WACC：= + 在估算公司的beta值時，通常會使用Hamada公式(=[1+(1−)/])，但在此個案中其負債呈現高成長為非固定常數，與負債融資上升時公司的財務風險會同時上升，因其不符合公式須具備的假設前提，故不可使用。因此決議直接估算整間公司的。 由於債券和股市關聯度較低，且公司償債能力良好(較無倒債風險)，所以我們假設 =0，因此， =(E/V)* +(D/V)*=0.59*1.11+0.41*0=0.65 接下來，調整公司的資本結構更趨穩定，目標的資本結構：D/V=60%，E/V=40% =0.65=0.4* +0.6*0，因此， =1.64 無風險利率 | 在考慮通膨與長期投資的情況下，採用30年期公債利率8.95% | 市場風險溢酬 | 採用spread between S&P500 and lon-term U.S. governement bond returns=7.43%，因其最能反映未來30年狀況 | 由CAPM: Re=Rf+ (Rm-Rf) =8.95%+1.64*7.43% =21.14% 假設公司以長期經營為目的，其負債資金成本=30年期公債+公司整體風險溢酬=8.95%+1.3%=10.25%，且稅率為44%的條件下可得： 公司整體的WACC=(1-t)*Rd*(D/V)+Re*(E/V) =(1-44%)*10.25%*60%+21.14%*40% =11.9% 2.分別求出 Marriot Corporation三個事業部門之 WACC： a. lodging部門：目標的資本結構：D/V=74%，E/V=26% | levered beta | E/V | Asset Beta | Weight(revenue的比重) | Weighted Beta | Hilton | 0.76 | 86% | 0.6536 | 23% | 0.150328 | Holiday | 1.35 | 21% | 0.2835 | 50% | 0.14175 | La quinya | 0.89 | 31% | 0.2759 | 5% | 0.013795 | Ramada | 1.36 | 35% | 0.476 | 22% | 0.10472 | | | | | sum | 0.41 | (1) 0.41= *26%+0*74%, Be=1.58 (2)由CAPM，Re=8.95%+1.58*7.43%=20.69% (3) Rd=8.95%+1.1%=10.05% (4) WACC=(1-44%)*10.05%*74%+20.69*26%=9.54% b. Restaurant部門：目標的資本結構：D/V=42%，E/V=58% | levered beta | E/V | Asset Beta | Weight(revenue的比重) | Weighted Beta | ...
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...Lifeline Health Products Assignment – completely answer the following questions: 1. Explain the rational for each of the four variables that make up a firm’s credit policy. How likely (and how quickly) are competitors to respond to a change in each variable, and is their response likely to be the same for a change toward tightness as one toward looseness? 2. What is Lifelines’ current days sales outstanding (DSO) [also called average collection period (ACP)]? What would the expected DSO be if the credit policy change were made? 3. What is the dollar amount of bad debt losses under the current policy? What would be the expected losses under the proposed policy? 4. What is the cost of granting discounts under the current policy? What would be the expected cost under the new policy? 5. What is Lifelines’ dollar cost of carrying receivables under the current policy? What would be the expected cost under the new policy? (Use a 360-day year.) 6. What is the expected incremental profit associated with the proposed change in credit terms? Should Lifelines make the change? (Hint: Construct income statements under each policy and focus on the expected change. 7. Does your analysis up to this point consider the risks involved with a credit policy change? If not, how could risk be assessed and incorporated into the analysis? 8. Suppose the firm makes the change to 3/COD, net 25, but Lifelines’ competitors react by making similar changes in their...
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...FINANCIAL MANAGEMENT PAPER Name: Class Time: 3:20PM. Case Study: Google Company Name: Google Inc. Traded As: NASDAQ:GOOG; NASDAQ: GOOGL Industry: Internet, Computer Software, Telecom Equipment Founded on: September 4, 1998 Founders: Larry Page, Sergey Brin Headquarters: Mountain View, California, USA Area Served: Worlwide Revenue: $59.825 billion (2013) Net Income: $12.92billion (2013) Employees: 40, 829 Of the thousands of stocks one can invest in, there is only a handful that you can rely on. Google is one of those companies. Introduction Google is an American Multinational Corporation founded by Larry Page and Sergey Brin. Google has a wide range of products and services including search engines, software, advertising and cloud computing. The company gets most of its profits from a service called ‘ADWords’ which is an online advertising service that places ads on search queries. Google’s total advertising revenues amount upto $42.5 billion which is a significant chunk of the total revenues. Google was initially set up as a private company in in September 1998 and later it went public in August 2004. Even though the company went public and the founder’s only own 14% of the company now however they still control 56% of the stockholder voting power through super voting stocks. Google has grown rapidly since it has been incorporated. Google initially just offered its flagship search engine however a series of mergers and acquisitions...
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