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THE FILES ATTACHED ARE WHAT YOU WILL USE:
PLEASE DO NOT ACCEPT IF YOU CAN NOT US
THE FILES ATTACHED ARE WHAT YOU WILL USE:
PLEASE DO NOT ACCEPT IF YOU CAN NOT USE EXCEL AND DO FORMULATIONS. I AM AIMING FOR A GRADE OF : B+. DO NOT MAKE THE PAPER TOO PROFESSIONAL BUT MAKE SURE YOU READ AND ANSWER FULLY.
USE THE FILES ATTACHED TO CONDUCT THIS CASE STUDY. BELOW ARE THE QUESTIONS THAT YOU WILL HAVE TO ANSWER.
Hershey
Assume that you are a member
of the Hershey Trust board. To whom (or what) do you owe your fiduciary
responsibility? How does the legacy of Milton S. Hershey affect your
thinking as a member of the board? Discuss the unique
challenges presented by the ownership structure of Hershey.
Based
on your valuation of HFC, do you believe the company was fairly valued by
the market before the announcement of the sale? Calculate the WACC for HFC
using the data provided in the exhibits; assume a Market Risk Premium of
5.5%. Estimate the stand-alone value of HFC using the free-cash-flow
projections provided in case Exhibit 10. You can submit your WACC
calculation and DCF analysis in a separate Excel file.
Discus
the non-price considerations of the offers. Which, if any, bid would you
vote to accept for the purchase of Hershey Foods Corporation? Is your
decision primarily based on the economics of the bids or the desire to
honor the legacy of Milton S. Hershey?
If
you decided to reject both bids and not sell HFC, what will you do to
achieve the diversification objective? If you decided to accept one of the
bids, what (if anything) would you want to communicate to the constituents
who opposed the sale?
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