CASE QUESTIONS Cash Flows and Value. Cost of Capital Case 1: Hop-In Food Stores‚ Inc. 1. Determine the correct price for this particular IPO. Use several methods to do this and compare them. 2. What extra information would you try to acquire in a real life situation? Case 2: Chem-Cal Corporation 1. How do you calculate the WACC for this firm? 2. What is the cost of capital of the debt‚ preferred stock‚ and common stock (assume the equity beta is 1.22)? 3. Calculate the WACC. How can a WACC be used
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Seven 13. Why was AMTRAK established? Relieved the railroads from the burden of having to provide passenger rail transportation. 14. List five (5) U.S. Class I railroads by their official abbreviations: CSX‚ NS‚ UP‚ BNSF‚ KCS‚ CN‚ CP 15. What did the Rail Reorganization Act of 1973 create? Conrail 16. In what year was the U.S. transcontinental railroad completed? 1869
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northeast of Baltimore. Amtrak Train 94‚ the Colonial‚ from Washington‚ D.C.‚ to Boston‚ crashed into a set of Conrail locomotives running light which had fouled the mainline. Train 94’s speed at the time of the collision was estimated at about 108 mph. Fourteen passengers on the Amtrak train were killed‚ as well as the Amtrak engineer and lounge car attendant. Two members of the Conrail locomotive crew tested positive for marijuana‚ and the engineer served four years in a Maryland prison for his
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hedge funds and investment banks in Germany. And meanwhile in 2007‚ until the beginning of 2008‚ TCI and 3G‚ 2 UK-based hedge funds‚ violated SEC disclosure requirements‚ hiding their objective to takeover CSX Corporation by entering into equity total return swaps with numerous investment banks. CSX was a one of the largest railroad and transport companies in Eastern US with returns exceed S&P during 5 years before the economic downturns‚ which made it attractive as a take-over prey. This report provides
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which they were employed. The emergency workers‚ the agencies such as NTSB‚ the Alabama Emergency Response Network and the U.S. Coast Guard are stakeholders as well. What are the interests of the stakeholders? Investors in the transport company‚ CSX and Amtrak stand to lose money as such disasters can lead to public distrust and subsequent falling stock prices. They must answer to the public as to why emergency signals were not designed on the bridge. Families have lost loved ones as passengers
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Porsche‚ Volkswagen‚ and CSX 1. Summary This case examines two examples of how equity derivatives have been used to gain leverage and corporate control for activist purposes. In 2008‚ Porsche’s CFO carried out the “short squeeze” to acquire control over Volkswagen through option contracts‚ which lead to huge losses for short-selling hedge funds. And meanwhile in 2007‚ TCI and 3G‚ 2 UK-based hedge funds‚ violated SEC disclosure requirements by hiding their intentions to takeover CSX by entering into equity
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Insight Report: Best Practice in the Reward Credit Card Sector On 11th July 2014 Summary : Banks are increasingly using rewards and loyalty programs as a tool for maintaining relationships with top-end customers‚ as these relationships provide high potential for revenue generation. Financial institutions are putting forward premium experiences and offers to increase loyalty and develop deeper banking relationships. Rightly positioned‚ unique rewards act as a key differentiator in a highly
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Executive Summary The case is about Porsche using cash-settled options to obtain control of Volkswagen silently and TCI and 3G using TRS to get control over ownership of CSX to initiate a meeting of changing the board members of CSX. In this report‚ I will detailed analysis how they processed their strategy using equity derivatives and what was the result. I will further discuss whether it is good thing to have CEO involved in equity derivative trading and whether the disclosure requirement should
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Introduction As individuals‚ Americans may desire to come to the aide of those in need out of the goodness of their hearts‚ but they are not legally obligated to do so. Traditionally‚ under American law‚ no general duty to rescue those in financial trouble is imposed on us. There may be a morale duty to rescue those in trouble‚ but the law leaves that to the individual and their conscience. So why are so many citizens looking to the government for help with today’s economic situation? Only
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TCI are the hedge fund that intended to take over certain company like CSX. These kind of hedge fund employ certain strategies that are different from other Hedge fund in the VW cases‚ they write options speculating the price of Volkswagen goes down‚ while earn the profit by option premium. they are simply the profit driven hedge fund In 3G and TCI case‚ hedge funds are exposed to 1. The risk of volatility of the CSX return because what 3G and TCI received from investment bank are totally
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