Ford Case

control over the company. Also, as we discussed in the cash option, share price will

Common Stock issued by Plyer in 2015 = $ 75,000 - $ 50,000 = $

a) How many shares will the firm have to issue, assuming they issue the new shares at the current price per share?

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

In April 2000, Ford Motor Co. announced a shareholder Value Enhancement Plan (VEP) to significantly recapitalize the firm's ownership structure. Ford had accumulated $23 billion in cash reserves and under the VEP would return as much as $10 billion of this cash to shareholders. In exchange for each share currently held, the plan would give stockholders one new share plus the choice of receiving $20 in either cash or additional new Ford common shares. Shareholders electing to receive cash would be taxed on these distributions at capital gain rates. Among other things, the plan provided a means for the Ford family to obtain liquidity without having to dilute their 40% voting interest (even though they own

6. If the company decides to go ahead with the targeted stock issue, what specific provisions or features should the stock include to ensure maximum value creation? How closely would you model USX’s targeted stock on GM’s alphabet stock?

(1) Summarize and justify alternative scenarios (i.e., compelling stories about the future) ranging from pessimistic to optimistic with regard to market performance of hybrid cars.

Explain what shareholders would receive in exchange for (a) old common shares, (b) old class B shares, and (c) old shares held in the employee saving plan.

Subsequent to the awards being granted, the stock price has fallen significantly. On January 1, 2008, Murray decreased the exercise price on the stock options to $12. This downward adjustment to the exercise price was made in order to ensure that the options continue to provide intended motivation benefit to employees. However, in addition

An unfortunate incident occurred between a giant truck and driverless shuttle filled with people enjoying a pleasant ride in downtown Las Vegas. The accident in question took place when a delivery truck in downtown Las Vegas grazed the front fender of the driverless shuttle. This was the very first vehicle of its kind that and it was powered by AAA and Keolis. The driverless shuttle was performing test runs, when a truck grazed the front of the eight passenger vehicle. This case is simply complicated, but I will prove that truck driver is truly at fault by investigating the vehicles, interviewing the witness, and considering the additional evidence

Because firm value will rise to $6,850.8 million immediately after the recapitalization announcement, original shareholders will capture the full benefit of interest tax shield since they are able to sell their stocks at a higher price. The new stock price is determined by dividing the value of the levered firm by the number of shares outstanding at the end of 1998. Since there were 185, 516,055 shares outstanding at year end 1998, the new stock price after the announcement of recapitalization would be $6,850.8 million divided by 185, 516,055, which is $36.93. Compared to the

The primary reason why Ford designed the VEP was that Ford believed its stock was undervalued and the undervalued stock was limiting the company 's ability to use its stock for acquisitions or to attract, retain or incentivize employees. Ford thought the VEP would enhance the value of its outstanding shares because the recapitalization will highlight its cash reserves and cash flow generating capacity, and also indicates management 's confidence in the future of the business. In addition, Ford believed the adjustments in the employee incentive plans by the recapitalization will tie Ford management 's compensation even more closely to the performance of its stock price.

Before performing the CVP analysis for the Hampshire manufacturing firm, we identify two basic cost classifications of interest comprising variable costs and fixed costs. As we analyze the case in study, we need to initially acknowledge that both variable costs per

Summit Partners proposes to FleetCor Technologies (later preferred as “FleetCor” or the “Company”) an investment into FleetCor for the total amount of $44.9 million in return for a post transaction ownership of 54.2% in the “Company” and coming down to 46% ownership in the company after newly created stock options for management equivalent to 15% ownership in the company has been completely executed and fully diluted. This investment is in the form of convertible preferred stock with an 8% accrued interest, compounding annually. As the transaction come through, Summit’s prefer stock will be treated equal-footing in

Consider the overall communication strategy of Toyota, including its strategic intent and positioning, the themed messages and message styles in Toyota’s communications. Given the challenges ahead for Toyota, how would you change the communication strategy in terms of strategic intent, themes messages and message styles?