Case ID: 201079     Solution ID: 22140     Words: 1164 Price $ 45

Ford Motor Companys Value Enhancement Plan A Case Solution

Case Solution

In April 2000, Ford Motor Co. reported a shareholder Value Enhancement Plan (VEP) to altogether recapitalize the association's proprietorship structure. Portage had aggregated $23 billion in real money holds and under the VEP would return as much as $10 billion of this money to shareholders. In return for every offer at present held, the arrangement would give stockholders one new share in addition to the decision of getting $20 in either money or extra new Ford regular shares. Shareholders choosing to get money would be exhausted on these conveyances at capital increase rates. In addition to other things, the arrangement gave an intends to the Ford family to get liquidity without needing to weaken their 40% voting interest (despite the fact that they possess just 5% of the shares remarkable). Students must grapple with the accompanying inquiries: Why was Ford proposing this exchange rather than a customary offer repurchase or a money profit? How did the hobbies of the Ford family figure this choice, and what did the exchange infer about the future inclusion of the family in the organization? Why was Ford circulating such a lot of money at this specific point in time? Did the conveyance flag an adjustment in the organization's voracity for making acquisitions or future capital uses? On the off chance that shareholders on the whole chose to get not exactly $10 billion in real money, how might Ford disperse the remaining money?

Excel Calculations

Questions Covered