Contemporary Issues
GROUP ASSIGNMENT
0BU(ACCOUNTING AND FINANCE)
Leah Mpondela 609-6340-02
Fadzai Gambiza 609-6406-02
Takundwa Muzenda 609-6452-02
Mariam Nantumbwe 210052-01091-010
Question 1
(Group Question) I. It is very evident that one of the main responsibilities that the Hershey Trust Board views their responsibility to be is to the Milton Hershey School. In 1918, Milton Hershey endowed the trust board. The objective of this endowment was to have full support for the Milton Hershey School. Further in March 2002, the Trust Board decided to make a decision that was more in the schools favor, which was making sure that its holdings were less concentrated in Hershey stock. Moreover, the composition of the
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Such company investments ought to end up increasing stock prices.
To make a fair evaluation of HFC and the other bidding companies we would compare the companies WACC and the required rate of return which in this case we would use the Ke (CAPM), where the Hershey’s WACC is less than the CAPM (which is used to estimate the required rate of return which is suitable for an asset). Taking the companies rates of return and the percentage for the wacc, for each invested dollar that the Hershey, Wrigley, Nestle and Cadbury Schweppes, 0.0041cents, 0cents, 0.0099cents and 0.0088cents respectively are values the companies managed to gain. Hence, Hershey was fairly valued by the stock market because for every dollar it was investing out of the bidding companies it was the one who was gaining less (this is not taking into consideration Wrigley because it is a company which only concentrates on chewing gums so it will not be fair to compare it with the other three companies.
Also, to support the point that the stock market did a fair valuation of Hershey, the market value of equity for Hershey was low even though it had the highest price per share out of the other three companies. It is the shares outstanding which were low that made Hershey incur a low amount of equity.
Exhibit TN8: Stock Price Reaction to Trust Board’s Announcements
Stock-price reaction to Trust Board’s Announcements is shown in the chart
What kid doesn 't like chocolate? Thanks to the iconic Milton Hershey brand, we now have sweets such as Hershey kisses, Reese 's cups, Kit-Kats, and so many more! This essay will discuss Milton Hershey’s life, contributions to society, his companies, and some facts that might not be well known about him and his company.
Hershey started with 500 acres of land to build the company; within one year of being open he expanded to 12,000 acres (Career). He made the company bigger and better as time went on. When Hershey first opened, milk chocolate was the only candy produced. Around 400,000 quarts of milk were used each day to manufacture chocolate, around half a million pounds of chocolate was produced a day. While planning the rest of the Hershey factory, Milton wanted his employees to have a safe, home-like environment to live in. Workers would need comfortable homes, medical care, recreational facilities, and school for their children. Not only would Hershey help them out financially, he would help them with personal issues too. The production took around a year to do. By then Hershey Company was ready to open and produce candy
The Hershey Company and Tootsie Roll Industries, Inc. have weathered the ”Great Depression” with a history of more than one hundred years in the confectionary candy making industry. Their vision and longevity have pushed them into the twenty first century to meet the needs of the community, consumer, affordability, environment and healthy control portions. Both companies have made available, reduced sugar, sugar free, nut free, peanut free and gluten free products that is reflected in their candies, gum and mints. The two companies are worth investing in, but may be better than the other.
The founder of Hershey Chocolate, Milton Hershey, had a long journey to creating some of the most famous candy today. From a young age he lived in poverty and his parents constantly fought due to differences, which would always have an impact on Milton’s life. He started out in the business struggling, first with his caramel business going under and the unhelpful advice of his father that only led to Milton making more mistakes. Once Milton made it big he went on to do amazing things and dedicated a big part of his life to helping other people and focusing on the well-being of his employees. Milton Hershey was indeed one of the most famous and successful people in the candy community, but it was only through many hardships and stress that got him there.
The Hershey Company is the leading North American manufacturer of quality chocolate, non-chocolate confectionery, and chocolate-related grocery products. The company is also a leader in the gum and mint manufacturer category as well. In this paper, I will discuss the history of the Hershey Company and the impact it has on the United States and the rest of the world.
As of 2008, Hershey Company still appears to be providing strong investor returns. Although its profit margin has decreased, its gross profit rate has remained steady, indicating that the Company is still effectively
What is competition like in the premium chocolate industry? Which of the five competitive forces is strongest? Which is weakest? What competitive forces seem to have the greatest effect on industry attractiveness and the potential profitability of new entrants?
Hershey has bought and produced tons of chocolate for over 50 years that has had the blood, sweat and tears of the not only the children on the Ivory Coast, but the adults as well. The way that Hershey has been able to sell to their consumers with very low prices on all their products is because they buy from the cocoa farms that have child slaves. Many of which were taken from their homes, sold or needed to provide for their families. They would come work for cocoa farmers and get paid little to nothing. Children who work on the Ivory Coast usually are between ages 12 and 16,
To facilitate the valuation aspect of the analysis, free-cash-flow forecasts are provided in case Exhibit 10 for Hershey as a stand-alone entity. Most students should find it easy to calculate a value for Hershey using the discounted-cash-flow (DCF) method and industry-comparable multiples, which also are provided. As with any valuation case, students must make judgments about the appropriate capital structure, the weighted average cost of capital (WACC), sales growth, and the terminal growth rate. Once students have explored the value drivers for Hershey though sensitivity analysis, they may then evaluate the bids from both Nestlé S.A.–Cadbury Schweppes PLC (NCS) and the Wm. Wrigley Jr. Company. They will want to examine whether the bids are fair from the perspective of HFC shareholders and whether the synergies assumed by the bidders in their offer prices are reasonable.
The tree begins with the “Hershey’s” bar because it only has chocolate, which is the common ingredient amongst all the candy. “Hershey’s” branches off into “M&M’s”,” Reese’s Cups”, and ‘Kit Kat”. The candies on this level all have two ingredients. "M&M’s" branch off into their own phylum because it is the only second level (candies consisting of two ingredients) chocolate with a coating. “Reese’s” and “Kit Kat” section off because although both have two ingredients, “Kit Kat” has a crunchy inside and “Reese’s” has a creamy inside. “Reese’s” does not branch off into other candies because it is the only candy with a purely creamy inside. “Kit Kat” and “M&M’s”, on the other hand, branch off into other candies. “M&M’s” lead to “M&M’s with peanuts”.
The following statistics stated in the case indicate that “23% of respondents would definitely buy the Montreaux dark chocolate with fruit product and 40% would probably buy the product.” These average ratings strongly suggest that this product should be introduced into the market very gradually. This strategy would enable the company to evaluate consumer buying patterns so that the company could determine future production levels and future marketing strategies that benefit both the company and the consumer. Financial information given in the case also indicates that the company needs to introduce this product very conservatively. Exhibit 1 informs that with 5.98 million total purchases, low awareness, low ACV and mediocre product, Montreaux would gross $17.44 million. Exhibit 2 shows that with medium awareness, medium ACV and an average product Montreaux would gross $25.1 million. These figures do not meet Montreaux’s objective of earning at least $30 million in its first year. Exhibit 3 shows a slightly improved situation: with high awareness, high ACV, and an excellent product, Montreaux would gross
The decision to sell the shared faced strong opposition from Hershey employees, local businesses, and politicians. The community did not want foreign company to take over Hershey Company due to the legacy of Hershey involvement in the community will be compromised and many jobs might be lost.
Hershey chocolate is known as one of the world’s most popular chocolate brands. For 118 years, the Hershey brand remains a favorite chocolate treat in over 90 different countries. Beginning only manufacturing milk chocolate, the company today manufacturers over 100 different varieties of candy. Many people are familiar with the traditional Hershey milk chocolate bar, Reese’s peanut butter cups, and bite sized Hershey kisses. The process behind producing these famed treats is a fascinating process. By evaluating the company’s manufacturing process and business dynamics, consumers can gain a better perspective of the science behind the candy the enjoy most.
million less compared to those in 1998, a drop of 12% (Refer Table I for the details of Hershey‟s
The Hershey Company, known until April 2005 as the Hershey Foods Corporation and commonly called Hershey 's, is the largest chocolate manufacturer in North America. Its headquarters are in Hershey, Pennsylvania, which is also home to Hershey 's Chocolate World. It was founded by Milton S. Hershey in 1894 as the Hershey Chocolate Company, a subsidiary of his Lancaster Caramel Company. Hershey 's products are sold in about sixty countries worldwide. In addition, Hershey is a member of the World Cocoa Foundation. The company has been topped to 384, compared with the previous rank 404, in 2013 (CNN, 2013). This paper is going to show the company’s international environment,