I. Summary: The Teletech Corporation is a U.S company that provides integrated information movement and management. It has two main business divisions‚ which are The Telecommunication Services‚ and The Products and Systems. In Telecommunication Services division‚ it primarily provided many kinds of phone service to business and residential customers. In fact‚ it performed a network for 7 million customer lines throughout Southwest and Midwest. The division archived an increasing average rate of 3%
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Teletech Corporation Background of the case Victor Yoarian‚ a reclusive billionaire had acquired a 10 percent stake of a telecommunications company named Teletech Corporation and has demnded two seats on the firm’s board of directors. Headquartered in Dallas‚ Texas defines itself as a “provider of integrated information movement and management.” The firm had two main business segments: Telecommunications Services‚ which provides long-distance‚ local and cellular telephone service to business
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Background Headquartered in Texas‚ Teletech Corporation operates under two main business segments: the Telecommunications Services segment‚ providing various telephone services to business and residential customers and the Products & Systems segment‚ which manufactures computing and telecommunications equipment. In late 2005‚ the Securities & Exchange Commission revealed that billionaire Victor Yossarian acquired a 10% stake in Teletech and demanded two seats on the board of directors. He felt
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Statement of Problem Teletech Corporation’s CFO‚ Margaret Weston needs to decide three things. (1) What are the appropriate hurdle rates for each segment of their business? (2) Is the Products and Systems segment underperforming? And (3) How should Teletech respond to the raider Victor Yossarian? Facts and Assumptions Teletech Corporation has two distinct business segments‚ the more established Telecommunications Services segment‚ and the recently added Products and Systems segment. These two
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1. How does Teletech currently use the hurdle rate? Teletech currently uses the hurdle rate in the assessment of the firm’s economic profit and NPV. The rate is based on an estimate of Teletech’s WACC. Currently‚ the hurdle rate for Teletech is 10.407%‚ using data in Figure 1. The case rounds this number to 10.41% 2. What are the segment WACCs for Teletech? What assumptions do you have to make to do these calculations? Using the data in Figure 1‚ we can calculate the WACC for the
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Reuters‚ the elderly population is at high risk for stroke and they are not aware of the symptoms‚ what to do if they occur and how to modify or manage these risk factors. If you or someone you are with are experiencing signs of a stroke DIAL 911!! Repeat after me! DIAL 911 What is a Stroke? A stroke is a brain injury that occurs when a blood vessel in the brain is blocked or bursts and causes bleeding‚ this is the important reason why we no longer give Aspirin before being seen by a medical professional
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Teletech has two business segments‚ Telecommunications Services and Products and Systems unit‚ for the last couple of months senior management at Teletech Corporation had been discussing returns. However‚ only until they received the letter from Victor Yossarian did they decide to spin into action and review the company’s returns‚ the hurdle rate that was being used company wise and not by business segments‚ the annual capital budget situation‚ the review of new possible policies‚ and finally they
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Greyhound Dial Case What environmental factors affected Greyhound’s businesses? Macroenvironment affects the intensity of rivalry within an industry. Demographic Technological o High production costs‚ inefficient plants o Products they would acquire are easy and inexpensive to imitate by much larger companies Cultural o Trautmans style vs Teets (new) Trautmans: ambitious about expansion and diversification Teets: cost cutter‚ effective hands on manager‚ liked to stay close
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Teletech Corporation‚ 2005 Kyle Fortin My recommendation for Teletech Corporation is to change from a constant hurdle rate to the use of two risk-adjusted hurdle rates‚ one for each segment. Teletech’s performance is evaluated based on economic profit calculations. Through this measure‚ the risk-adjusted hurdle rates return a higher amount of profit compared to a single corporate hurdle rate. Currently‚ the firm has been using 9.30% as their hurdle rate‚ and as a result the firm’s share prices
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Case 15 Version 2.1 Teletech Corporation‚ 1996 Teaching Note Synopsis and Objectives In January 1996‚ the chief financial officer of this telecommunications company must fashion a response to a raider who claims that a major business segment of this company should be sold because it is not earning a satisfactory rate of return. The case recounts the debate within the company over the use of a single hurdle rate to evaluate all segments of the company versus a riskadjusted hurdle-rate
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