Arch Communications Essays

1. Given the proposed financing plan, describe your approach (qualitatively) to value AirThread. Should Ms. Zhang use WACC, APV or some combination thereof? Explain. (2 points)

Financial Position: Currently, Fantastik has a 37.9% dollar share in the all-purpose cleaner market in Canada which amounts to $12,128,000 (Figure 2). Using the current retailer mark-up of 23%, we can find Fantastik’s sales which are 9,860,162.60 (Figure 2). Overall it is difficult to gauge how well Fantastik is doing. Its gross profit after costs of goods sold and discounts is $3,544,065. Since fixed costs are not known, we do not know if Fantastik is

For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion.

Each of the following parts describes a firm that was an early mover in its market. In light of the information provided, indicate whether the firm’s position as an early mover is likely to be the basis of a sustainable competitive advantage, and explain why or why not. (2 points: 1 point each)

6. Outline a plan, based on the information provided in the scenario, which the company could use in order to evaluate its financial performance. Consider all the key drivers of performance, such as company profit or loss for both the short term and long term, and the fundamental manner in which each factor influences managerial decisions.

2) Merger or Acquisition to defend market share. Considering two options: a) Acquire its closest competitor and licensee Astro Packaging. This operation would allow Sealed Air to get a critical size and increase its revenue to mitigate the impact of the raise of GAFCEL. The disadvantage of this option is that it won’t provide a significant competitive advantage due to inferiority of Astro’s manufacturing process. b) Merge with GAFCEL. By this mean, Sealed Air would enlarge its portfolio of products with uncoated products, diversity its workforce, and take advantage of the technological innovations of GAFCEL. The downside of this approach is that it bears significant financial and organizational risks.

1. Please conduct a financial ratio analysis using the data in Exhibit 2. How do the results reflect different strategies pursued by the 4 firms?

Aside from the two aforementioned proposals the company can raise its leverage in other ways. By conducting DuPont analysis and understanding operating leverage we see that purchasing fixed assets and decreasing stockholder’s equity will raise the equity multiplier and the firm’s operating leverage. In this instance we recommend against this approach as the firm already has a large amount of excess cash above what they require to fund new positive NPV projects and purchase new assets. Investors would rather see their capital returned to them in the form of share repurchases and dividends as it is evident by the company’s cash stockpile that they can

1. From a strategic management standpoint, why do you think that corporate management at Alcoa delayed taking action for five years as the plant continued to lose money and deteriorate in other operational measures?

* For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion.

Nova Chemicals operates in both the basic and specialty chemicals segments. The IPD division that produced basic chemicals is under review for sale to United Chemicals due to its apparent poor performance. On further review it appears that the offer of $160 million is much lower than the actual value once the R&D expense is reallocated. At the same time since the IPD division does not share synergies with the other divisions it is recommended to either spin off the division or institute a tracking stock to make its actual value transparent to the market and thereby prepare it for a future sale. In order to raise the capital for a capacity expansion for the high growth Environmental Products division we recommend

On September 4, 2001, Steve Papa, CEO and founder of Endeca Technologies, could hear a construction worker nailing a “Commercial Real Estate Available” sign to a building across the street from his Cambridge, MA office. This had become routine, as hundreds of early stage technology companies failed to raise additional growth capital. The words of his Vice President of Marketing, Steve Sayre, warred with the sound of the construction. “I know the board is actively working on the C round,” Sayre said. “We’d better get this funding closed; I don’t think the NASDAQ is going to hold up.” Papa knew that his CFO shared Sayre’s concerns. To an even

Within this case analysis, we will examine Autozone's stock repurchasing program, as well as the mechanics behind it and the benefits it provides to the firm. Additionally, this report will analyze the alternative operating cash flow options Autozone should consider, detailing the benefits and costs of each option. A comprehensive examination of these operating cash flow alternatives will be presented, allowing for the determination of the most viable alternative for the use of Autozone's operating cash flows.

A special dividend was paid to the shareholders of the company when Sealed Air Corporation borrowed the total common stock for a value of 90% of its market value. This was a program which was basically initiated by the management of the company for improving the product quality and improving the efficiency of the manufacturing processes of the company. The leveraged recapitalization was used as a watershed event and this was done successfully and purposefully by the management of the company.

Not since the big retailing bankruptcies of the early 1990s has so much money been lost on Wall Street. Everyone is screaming murder.1 — Wall Street trader On January 28, 1997, one month after filing for Chapter 11 bankruptcy, Marvel Entertainment Group, Inc. (Marvel) filed its plan of reorganization with the United States Bankruptcy Court in Wilmington, Delaware. According to the plan, Ronald Perelman, Marvel’s largest shareholder, would recapitalize the company by investing $365 million in exchange for 427 million newly issued shares. Perelman would then own 80% of the reorganized company’s equity while public