KENNECOTT COPPER CORPORATION Essay

2. Do you favor the proposed acquisition of UCP? What are the primary sources of value in such a transaction? Is the proposed price reasonable?

Mortensen’s cost of capital estimates are used for a variety of purposes at both the divisional and corporate levels. Examples include internal analyses such as financial accounting, performance assessment and capital budgeting, while others are used for strategic planning purposes such as merger and acquisition, as well as stock repurchase decisions (Luehrman and Heilprin, 2009, pg.1). When used at the divisional rather than corporate level, special consideration should be given to the fact that Midland’s divisions are not publicly traded entities, and therefore do not have individual Beta

The questions that follow and the article Comparing the Accuracy and Explainability of Dividend, Free Cash Flow, and Abnormal Earnings Equity Value Estimates will inform your completion of Milestone Three. An understanding of the models in this assignment will assist you in hypothesizing the incremental impact of a new investment project for the company. The understanding of these models will contribute to your ability to look toward the future when considering the direction of an organization. This activity is worth a total of 75 points. See the distribution of points listed before each question.

Our estimated cost of capital, 20.81%, is lower than Ricketts’ expected return, 30%-50%, thus the investment is worthy. However, it’s higher than other pessimistic members’ expected return, 10%-15%, making the decision more complex and requiring further valuation。

For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion.

in our calculations, as this company exhibited dramatic value differences to others in the sample, (likely to skew our results and prove misleading). Using the average of the revised sample field for each ratio, we inserted Torrington’s values where appropriate to generate an entity value. The findings generated two values for Torrington, 606 million and 398 million. Taking the average of these two numbers, Torrington exhibited a relative value of 502.41 million. Because of the lack of related information given in the case, and the often large differences in measures amongst competitors, different capital structures, internal management strategies, there remained many unknowns in our model. We decided it would be best to use this valuation to reaffirm our assumptions in our DCF valuation. (Please see exhibits)

* For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion.

Exhibit TN-1 Calculation of Value of Nicholson to Cooper Based on Discounted Cash Flow Analysis

1. Assess Interco’s financial performance. Why is the company a target of a hostile takeover attempt?

This company produces almost seven percent of all copper in the United States, and as such, it is the second-largest producer in the country. Kennecott’s top mine produces 19 million tons of copper annually. Kennecott is a division of Rio Tinto, which is an international mining concern with stakes in almost every continent. Rio Tinto is based in the United Kingdom and traded on the NYSE. For more information about Rio Tinto itself, go to www.riotinto.com. For information about Kennecott, go to

4. Consider the Worldcom-MCI merger and the Qwest-US West merger. Trying to avoid hindsight bias, should the board of MCI and US West have accepted these offers? What is the obligation to shareholders? Was that obligation fulfilled? What about WorldCom and Qwest? Did their shareholders benefit?

Throughout this case I believe that there are two groups of ethical decision makers the copper companies and the courts hearing the case(s). Once the issue was brought to the attention of the copper companies they still never made any efforts to try and fix the problem or compensate the farmers. They immediately went into defense mode. The courts became the ethical decision makers once the case was brought to them. It was then their responsibility to ensure justice was served and the rights of those involved on both sides were protected under the law.

Research Objective #1: Determine the Rate and Amount of Copper Release from Treated Wood by Fungal Exposure to Four Copper Tolerant Brown-Rot Fungi

1. Assess Interco's financial performance. Why is the company a target of a hostile takeover attempt?

The purpose of this experiment is to analyze the efficacy and accuracy in determining mass composition of copper in a penny using two methods: atomic absorption spectroscopy and ultraviolet-visible spectroscopy.