Note: These questions are here to guide your reading of each case. They are not meant to be submitted to me or be graded by me. You should try to work on these advance questions ahead of class. This will enrich your class participation. Caution: Your thought process should not be limited by these questions. You should try to think of additional issues. Please refer to your syllabus for additional information regarding preparation for cases.
I. Deutsche Brauerei
1) What accounts for Deutsche Brauerei’s rapid growth in recent years? Specifically, what policy choices account for this success? 2) What is Deutsche Brauerei’s credit policy toward its distributors in Ukraine? Why is it different from the policy toward its other distributors? Is the company’s credit policy appropriate? Is it profitable? If not, how would you change it? If so, what arguments would you offer to the board of directors in its defense? 3) Why does this profitable firm need increasing amounts of bank debt? 4) As a member of the board of directors, how would you vote on: a. The proposed raise for Oleg Pinchuk?
b. The quarterly dividend declaration of EUR698,000? c. Adoption of the financial plan for 2001?
In a separate file, there is supplemental information regarding the brewery, please review them to facilitate your preparation of the case and answering the above questions.
II. Euroland Foods S.A.
General advance questions for case preparation
1) Prepare to discuss the strengths and weaknesses of the various measures of investment attractiveness as used by Euroland Foods. Will all of the measures rank the projects identically? Why or why not? 2) Please rank the 11 proposals on the basis of purely economic considerations. Then rank them a second time based on any other considerations that you believe are important. Are the rankings...