An oil company wants to divest its low-growth chemicals division, which has an estimated stand-alone value of around $5 billion and represents around 40 percent of the entire oil company’s value. What do you think could be the most promising transaction approaches and why?
Answer to relevant QuestionsDefine optimal capital structure. What is the relationship between optimal capital structure, corporate value, and cost of capital? How does the concept of effective capital structure differ from optimal capital structure? Start-up companies typically have little or no debt. Discuss if and how this fits with value maximization given the cost-benefit trade-offs between different levels of debt and tax savings, overinvestment, business ...Company shares are often categorized as growth stocks or value stocks by certain agencies. Why are these labels misleading? What is the difference between growth and value stocks? One of the most common deferred tax liabilities occurs because of accelerated depreciation. When is the difference between reported taxes and cash taxes likely to be greatest? When will it be smallest? Can it reverse? That ...Using an Internet search tool, locate Procter & Gamble's investor relations web site. Under "Financial Reporting," you will find the company's 2009 annual report. In Note 8 of the annual report (which is titled ...
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