FIN 320 Lecture Notes - Lecture 8: Leveraged Buyout, Credit Risk, Cash Flow

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The new dual track process used by the ford company to initiate the reflection for strategic alte(cid:396)(cid:374)ati(cid:448)e(cid:863) affe(cid:272)ts the (cid:271)idi(cid:374)g p(cid:396)o(cid:272)edu(cid:396)e fo(cid:396) he(cid:396)tz (cid:271)y p(cid:396)o(cid:448)idi(cid:374)g the (cid:272)o(cid:373)pa(cid:374)y a(cid:374)othe(cid:396) pla(cid:374) to hit if othe(cid:396) (cid:448)ia(cid:271)le sale oppo(cid:396)tu(cid:374)ities fall th(cid:396)ough. Fo(cid:396)d"s st(cid:396)ategy (cid:449)ould gi(cid:448)e he(cid:396)tz othe(cid:396) optio(cid:374)s to get (cid:271)a(cid:272)k necessary capital, therefore dropping the quantity of risk. This plan would then give company a base bid that would be either equivalent to or more than the amount of what might be in theory obtained from an ipo. The new plan makes the bidding process more difficult for the company because the company has to gathered more information and data to execute that process or strategy. Although this new strategy provides the acceptable price but the cost for the group is higher and ford will get the reasonable value for its shareholders.

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