Ford Motor Co

get over Executive Summary hybridization beat back follow announced a shareholder Value enhancement envision (VEP) on April 14th, 2000, this syllabus allow significantly recapitalize the stanchs ownership structure. Reflecting upon the case study, we feel that this VEP can non fore construeably carry any meaning(prenominal) range to Ford shareholders. The main points we looked at during our digest were: As an institutional investor are we in estimation of this object? What options would we waste if the plan went through? Is this plan driven by the Ford Family? How does it address their needs? The actual plan contains more comestible and clauses but in summary, Ford will be re-distributing up to 10$ billion dollars in a work on of a 20$ per share dividend, which can be interpreted in the form of forward-looking note or specie. The cash dividends will provide the Ford family liquidity without selling level B shares. Shareholders would be able to e xchange existing shares for naked shares, and soak up 20$ per share cash or equivalent in new coarse shares. It should be observe that capital gains impose apply. As an institutional investor, we are not in favor of the Ford Value enhancing plan.

Through extreme analysis, we can see that this plan would drop enterprise value (lowering cash/equity), decrease Ford liquidity, and with dilute voting rights of uncouth shareholders. Under the agreement, the Ford family is able to keep their 40% voting power, while effectively lowering their 4.9% equity position to 3.6%. The plan also allows Class B shareholders to receive common stock dividend by new issuance, and this explicit ly violates the 1 share, one ballot princi! ple. From the case, opponents of the plan argued commonplace shareholders should have the right to independently venerate or disapprove a transaction that would result in the issuance of common shares to the Ford family. From our understanding, this plan could be replicated by the purchase or sale of current Ford shares, and one viable alternating(a) could be a stock...If you want to get a honorable essay, order it on our website: OrderEssay.net

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