The Following Information Is Available About Chiantivino Corp.(CC)

question 14

Essay

The following information is available about Chiantivino Corp.(CC):
An activist investor is confident that by terminating CC's money-losing fortified wine division,she can increase free cash flow by $4 million annually for the next decade.In addition,she estimates that an immediate,special dividend of $10 million can be financed by the sale of the division.
a.Assuming these actions do not affect CC's cost of capital,what is the maximum price per share the investor would be justified in bidding for control of CC?
What percentage premium does this represent?
b.Show your answer if you conduct a sensitivity analysis by assuming the cost of capital is 15 percent and the increased cash flow is only $3.5 million per year.

Recognize the significance of perceptual accuracy in evaluating others, especially in contexts like employment interviews.

Understand the concept of attribution and its impact on perceptions and behavior in the workplace.

Recognize how workplace ethics and social responsibility initiatives can improve factory practices and working conditions.

Identify common perceptual errors in the workplace and their consequences.

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