China Huiyuan Juice Group Limited On September 3‚ 2008‚ the Coca-Cola Company offered to buy China Huiyuan Juice Group‚ the nation’s largest juice maker (which is listed in Hong Kong)‚ for 17.92 billion Kong Kong dollars in cash. The acquisition was halted by Chinese regulator. On March 18‚ 2009‚ the Ministry of Commerce (MOC) announced that Coca-Cola’s bid to acquire Huiyuan failed to meet the country’s anti-monopoly law. Huiyuan gained 149 percent from the time before the offer announcement to
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1. Do you think Mercury is an appropriate target for AGI? Why or why not? Mercury is an appropriate target for AGI. AGI is looking to increase its revenue and profit by utilizing synergies. The initial aim of AGI for acquiring Mercury Athletics is to increase leverage with contract manufacturers and to boost the cooperation with the retailers and distributors. AGI was one of the most profitable and successful companies in the market segment‚ but the firm’s size remained rather small in comparison
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.................................................................................................... 5 3.3 Remedies to Agency Conflicts and their Costs ........................................................................... 5 3.4 Jensen’s Free Cash Flow Hypothesis .......................................................................................... 6 3.4 Using the Tobin’s Q ..................................................................................................................
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consider the following questions: 1. Can you rank the projects simply by inspecting the cash flows? 2. What criteria might you use to rank the projects? Which quantitative ranking methods are better? Why? 3. What is the ranking you found by using quantitative methods? Does this ranking differ from the ranking obtained by simple inspection of the cash flows? 4. What kinds of real investment projects have cash flows similar to those in Exhibit 1? This case was prepared by Robert F. Bruner‚ with the
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|(2-6) Statement of Retained Earnings | | | | | |In its most recent financial statements‚ Newhouse Inc. reported $50 million of net income and $810 million of retained earnings. The previous retained earnings | | |were $780 million. How much in dividends was paid to shareholders during the year? (Brigham 79)
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debt increases‚ would the expected return of the stock be higher or lower than in part b)? (4 points) d) Explain what is wrong with the following argument: “If a firm issues debt that is risk free‚ because there is no possibility of default‚ the risk of the firm’s equity does not change. Therefore‚ risk-free debt allows the firm to get the benefit of a low cost of capital of debt without raising its cost of capital of equity.” (3 points) Solution to Part I What is important? Perfect capital
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* Indian Accounting Standards * Indian Accounting Standard vs US GAAP (This would also cover the manipulations often done by companies to show higher profits) 2. Cash Flow Analysis * Measuring operating / financing and investing Cash flows. * Cash flows and life cycle state of a company * Cash flows and financial flexibility (linkages to dividend policy and over retention of profits) 3. Assessing Business Performance * Operational efficiency ratios (Gross profit
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management has narrowed down to opt this two staged transaction. The expected cash flows of the Seagate were stable and established‚ this makes leverage buying possible‚ since the borrower is well credit rated‚ cash flows are steady and the interest rate offered is financially reasonable. Question 2 Stakeholders interest to the reconstruction deal: All parties to the deal are considered to be winners if it is a consented out of free will. However‚ parties to the deal to do not win equally. Seagate shareholders:
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increased sharply. * The cash and short –term investment fell Effects of expansion on Liability & Equity side of the balance sheet: * Total current liability increased which inferred that suppliers were financed some amount spent for expansion * Long-term debt also increase to help the expansion * Only small amount of income that can be retained since it encounters a net loss and even it needs to pay the dividend. b. Conclusion from the Cash Flow: * Instead of contributing
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happening in the market for debt capital. The fact is that‚ globally‚ $11.5 trillion of debt will come due in the next five years‚ half of it in the U.S.‚ and half of that in the financial services industry. This is one reason we see large stockpiles of cash‚ especially in the financial services industry. Over the same fiveyear period government debt is expected to increase annually by 9% to 11%. This means that the demand for debt capital will likely increase significantly‚ and‚ with it‚ interest rates
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