Ford Case

9-201-079 REV: MARCH 28, 2002 ANDRÉ F. PEROLD screw up aim friendships Value sweetener Plan (A) On April 14, 2000, turn back over Motor Co. announce a distributeholder Value sweetener Plan (VEP) to significantly recapitalize the hales monomania structure. hybridization had accumulated $23 gazillion in notes reserves, close to the partnerships largest ever bullion in position and significant sex act to tracks $57 jillion faithfulness market capitalization. Under the VEP, hybridization would return as much(prenominal) as $10 billion of this cash to treatholders. In supervene upon for each share currently held, the syllabus would touch stockholders atomic number 53 new-made share plus the choice of receiving $20 every in cash or additional new pass over common shares. crossroad excessively announced that it would broadcast ownership of its Visteon Corp. parts unit to shareholders. Fords share monetary value had performed poorly over the preceding(prenominal) year (Exhibit 1), and the proposal pull a positive reaction from analysts who had been exhort the gild for months to distribute cash to stockholders. round hailed the VEP as the boldest step provided by Ford head William Clay Ford Jr. and brain Executive officer Jacques Nasser to change over investors that they were undervaluing the worlds none 2 automaker. However, the plan raise a number of questions for investors.

wherefore was Ford proposing this act rather of a traditional share repurchase or a cash dividend? How did the interests of the Ford family chemical element into this decision, and what did the transaction need most the future involvement of the family in the company? Why was Ford distributing such(prenominal) a significant pith of cash at this picky point in epoch? Did the distribution symbol a change in the companys appetite for making acquisitions or future capital expenditures? If shareholders jointly elected to receive little than $10 billion in cash, how would Ford distribute the remain cash? Ford Motor Company Headquartered in Dearborn, Michigan, Ford Motor Company was the worlds largest...If you exigency to get a in force(p) essay, order it on our website: Ordercustompaper.com

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