Sally Jameson

  IRIS RUNNING CRANE CASE STUDY Iris Running Crane, an MBA graduate candidate, is trying to choose among three different job offers in private equity sector. Her first option is Sunstorm Investment Group, which is one of the most respected buyout groups in the world. Her second option is Red Horse Partners, which is a middle-market LBO group. The third is Lepus Capital; tries to reposition itself like a turnaround expert, beginning using its own portfolio. In this study case, I will try to analyze the advantages and disadvantages of each offers and try to determine which offer might be the best for her personal career goals in the future. Before analyzing job offers, I determined the expectation of Iris about her job

If we ignore tax considerations and assume that Sally Jameson is free to sell her options at any time after she joins Telstar she has several chooses.

The maximum share price, if Herbert Kohler is willing to settle with the dissenting shareholders to stop the trail on April 11, 2000, is $120,680.  Given the probability of the two outcomes, the expected price for $273,000 per share claim (probability 30%) was $81,900 and the

Because we have not been notified of any substantial changes within the company’s financing agenda or asset acquisition goals, we find it safe to assume that Telus will continue to use the same financing weights in the near future. Another thing that we believe Telus should consider is avoiding the issuance of Preferred Stock in the future. Although this type of stock is less restricted, it can considerably affect the company’s overall cost of capital based on a higher after-tax cost and given that this type of stock is not tax

price of ABC stock on January 1, year 1, when the options were granted). The options vest 50 percent at the

Jack feels that the company should go under a new system to increase efficiency for their warehouse and inventor. Liz is concerned that the investment for the (ASRS) may not yield the necessary return to justify the investment.

Art Marks should vote to make an investment in Telco Exchange because the company possesses many of the components which could make it a potential 67 million dollar company (from our valuation by DCF method using WACC -Appendix A). Telco has a product that solves large company high cost issues revolving around telecom equipment and telecom services (makes around $250,000 per software licensing deal). They have been profitable in 2002 and the potential to have a revenue of a 50 million annual revenue in four years time. They have

2. Evaluate the two offers in Exhibit 7. What explains the two structures? In each case, what is the value to MCI shareholders?

Most important, the employees can earn stock, which gives them voice within the company to make pertinent decisions.

In addition to the analysis of decision tree, there is still a qualitative consideration that has impact on structuring the decision. Indeed, with the external financing, the existing owners share composition will be changed that would trigger the control power issue and impose a significant number of restrictions on Purinex, including preferences for board appointments, antidilution rights liquidity, participation, and negative covenants. Therefore, choosing the angel option would offset this negative impact because Purinex 's ownership percentage will still be 89.74%, which is much greater than a 60% for the VC option.

The net present value (NPV) of each option has been calculated and included in Table 1, based on figures from the study group report. Unfortunately, these figures are flawed in the same manner as Wriston’s current performance and accounting mechanisms in that they don’t properly allocate revenue, nor do they recognize inherent manufacturing complexities. The plant closure option’s expected operational gain seems particularly suspect. A better valuation of the new plant options is perhaps

Stock options provide a financial incentive to employees. If the company does well, then the employees benefit financially. Providing this benefit has the effect of the employee having a vested interest in how the company performs; therefore, the employee will work hard, do their best work, and stay

Stock options are granted to employees as a form of compensation or incentives. Both public and private companies follow this practice. The options give the executives the right but not the obligation to buy the company’s shares at a fixed price before the expiration date is reached. If the company does well, its shares prices rise. But the employee can buy the shares at a lower price fixed at the beginning. This will give the employee instant profit. Knowing that he/she will make a profit when the company’s share prices go up, the employee is motivated to work hard for the company to grow. This is why employee stock options is such a popular method of compensation among many companies. However according to Hall, critics state that the stock options only motivate the employee to work harder for the immediate boost of the company’s sales so as to increase their own profits and that the employee has no real interest in the actual long term benefit of the company. It ends up in a win-win situation between the company and its employees. He cannot sell the options, he cannot pledge them as a collateral for a loan. Stock options is a contract that the employee / executive has with the company whereby he/she has the right to buy a specific amount of stock within a specific period of time. Generally the maximum period is 10 years. The employee has to be in good standing with the company and has to perform well. The options are vested in him and he has the right to

Telstra under Sol Trujillo’s leadership continued to make headlines in Australian media as Trujillo was expecting to pay himself up to $17 million for the financial year of 2007/2008 although 66 percent of shareholders voted against the new executive pay structure it went ahead as the votes were non-binding. Furthermore, Telstra was facing a lawsuit because s shareholders were not informed about Telstra’s decline in revenue of $1.2 billion for its fixed-line phone business from 2005-2008. Telstra settled the law suit for $300 million before further proceedings (Moran, 2007).

100 and earned a profit of (Market price – rs. 100 – Rs. 2) . If price is less than Rs. 100 then Mahesh will not exercise the option and don’t purchase the share and will be in a loss of Rs. 2 per share.