FIN3CSF S2 2015 Assignment 1
Submission:
You may submit this assignment individually or as part of a group of up to 3 people.
Length: 1,000 words (+/- 10%).
Use Microsoft Word.
An electronic version of the same assignment should be submitted to the LMS site for this subject by 4.00 pm, Monday, 3 August 2015.
Supporting Material:
Case Studies in Finance - Managing for Corporate Value Creation (7th edition); Bruner, Eades & Schill; Case 50, Flinder Valves and Controls, Inc. pp. 715-726.
Supporting spreadsheet: Case_50.xls.
Appendix 1 to this document.
Assignment Questions:
1. Use the information in Case 50 and the supplementary data in Appendix 1 to answer the following questions:
a. What are the relative strengths, weaknesses, opportunities and threats of FVC and RSE? (4 marks)
b. What is FVC currently worth premerger? (5 marks)
c. What is FVC worth assuming the merger occurs and the cost gains are derived (2 Marks)
d. What is FVC worth based on recent transactions (2 marks)
2. You work for an Insurance company who are considering the appropriate structure of investment portfolios to support the following new forms of business. Provide brief comments on the likely structure of the investments within these portfolios. (3 marks)
a. Comprehensive annual private use motor vehicle insurance policies;
b. Workers Compensation Insurance policies; and
c. Socially Responsible Investment Fund.
Appendix 1
Supplementary Information for Flinder Valves and Controls Inc.
As Bill Flinder neared retirement, the idea of selling FVC to a bigger firm seemed almost necessary. He had a good top-management team, but he didn’t think any one of them could step in and run the show alone. He found stability in the RSE International combination that was worth something to him. In the increasingly global market place with more costly development, FVC needed a deep-pocketed partner to expand and to bankroll more research. Flinder believed that the company would also benefit from gaining access to a large
You may submit this assignment individually or as part of a group of up to 3 people.
Length: 1,000 words (+/- 10%).
Use Microsoft Word.
An electronic version of the same assignment should be submitted to the LMS site for this subject by 4.00 pm, Monday, 3 August 2015.
Supporting Material:
Case Studies in Finance - Managing for Corporate Value Creation (7th edition); Bruner, Eades & Schill; Case 50, Flinder Valves and Controls, Inc. pp. 715-726.
Supporting spreadsheet: Case_50.xls.
Appendix 1 to this document.
Assignment Questions:
1. Use the information in Case 50 and the supplementary data in Appendix 1 to answer the following questions:
a. What are the relative strengths, weaknesses, opportunities and threats of FVC and RSE? (4 marks)
b. What is FVC currently worth premerger? (5 marks)
c. What is FVC worth assuming the merger occurs and the cost gains are derived (2 Marks)
d. What is FVC worth based on recent transactions (2 marks)
2. You work for an Insurance company who are considering the appropriate structure of investment portfolios to support the following new forms of business. Provide brief comments on the likely structure of the investments within these portfolios. (3 marks)
a. Comprehensive annual private use motor vehicle insurance policies;
b. Workers Compensation Insurance policies; and
c. Socially Responsible Investment Fund.
Appendix 1
Supplementary Information for Flinder Valves and Controls Inc.
As Bill Flinder neared retirement, the idea of selling FVC to a bigger firm seemed almost necessary. He had a good top-management team, but he didn’t think any one of them could step in and run the show alone. He found stability in the RSE International combination that was worth something to him. In the increasingly global market place with more costly development, FVC needed a deep-pocketed partner to expand and to bankroll more research. Flinder believed that the company would also benefit from gaining access to a large