Ford Motor And Value Enhancement Plan

In the open market share repurchase, the firm may or may not declare the repurchase. Depending on the market condition and the firm’s position in the industry, the firm can decide when and how many

Management considering share repurchase program should weigh its benefit of financial discipline, efficient corporate strategy implementation and utilization of tax shield against the downside of cost of financial distress. It’s not the possibility of bankruptcy that causes concerns among equity holders regarding extent of leverage but the direct costs (legal, liquidation, administrative etc.) and indirect costs (deteriorated corporate image, management time and attention, agency costs of value-destructing investment, distress asset sales etc.). Exhibit 4 lists the key assumption inputs of approximating quantitative firm value/ equity value accretion. Levering UST to a larger extent by adding $1,000m does increase firm value.

or a combination of cash and new share. Based on the following analysis, Ford should go

The repurchase program increases the shareholder’s value. This is because of a rise in the price of the shares of the original shareholders.

The market shares and stock prices of Ford have been declined in recent years. No further steps have been taken by the Ford

b. The overall profit would be a function of the customer’s satisfaction level. Hence a profit

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?

Pro-forma income statement and key credit rating determinants are shown in Exhibit 2 and 3 respectively. Remaining share no. of 158.3m after repurchase is based on proportional value addition distribution between cash-out and remaining shareholders and this number is inserted to calculate earning per share and corresponding immediate share price change after announcement of repurchase program. According to Exhibit 3 and industrial average of relevant grades, only fund flow/ total debt and total debt/ capital measures are not comparable with A credit rating. Considering EBIT and EBITDA interest coverage are two most important criteria and equity market value is so substantially different from book value which leads to a healthy

Value investing is a way of investing in company stocks that are considered either undervalued or out-of-favor by the market. In other word, a value investment is one where the intrinsic value of the stock is not accurately reflected in the current market valuation. The underlying reason of too much decreasing in the stock price is that the company may be losing market shares or even in trouble due to market’s panic attributed to negative rumors as well as having management problems. Since the market price

The primary activities of a company are the source of customer value. Productivity, quality, and cost efficiency are all very important factors for the operations activities of Ford when it comes to creating customer value. The Way Forward plan has certainly put the company on a path to achieve profitability and to accelerate product development to provide customers with value through improved quality. The company is currently matching foreign rivals in quality surveys, which is a positive step forward, and continuing to make its manufacturing plants as efficient and effective as possible by stressing strategies and processes to maximize operational quality and efficiency. Ford has aligned its goals of manufacturing with marketing by focusing on a customer driven strategy, aligning plant capacity with customer demand. In the area of

This Corporate Finance paper focuses on analyzing the challenges that Northampton Group Inc. (NGI) is facing as it tries to increase shareholder value. In the case study it is stated by the firm’s major shareholders, that they believe NGI is currently undervalued. In connection with this, the management of NGI is considering several means of increasing the shareholders value. Due to difficult economic conditions resulting from the Global Economic Crisis, there are both

Moreover, it is assumed that an organisation has cash flow perpetuity growth rate of around four per cent. On the other hand, reduce the growth rate to three per cent, and the firms fair value tumbles from two hundred million to one-ninety million; lift the development to five per cent and the worth ascensions to more than two-forty million. In addition to this, raising the discount rate by one per cent pushes the valuation down to one-eighty million, while a decline of one per cent helps the firm to worth to more than two-fifty million (Copeland, et al.,

Ford Motor Company current mission statement is “committed to provide personal mobility for people around the world”. With that in mind their vision is to become the world’s leading Consumer Company for automotive products and services. By improving everything they do, the company provide superior returns to their shareholders (Vision, Mission, Values). Ford Motor Company 's objective is to deliver a total return to shareholders in the top quarterly of the S&P 500 over time. The company will meet this goal by the transformation into the world 's leading consumer company for automotive products and services which