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Economics & Finance

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published: 10 Jan 2006

  • Topic: Economics & Finance
  • Industry: Financial Institutions
  • Region: North America

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Abstract:
This is a technical note on the role of analysts and certain terms they use in analyzing companies. This note also outlines the introduction of several NYSE and NASDAQ rules that require analysts, in some circumstances, to disclose certain conflicts of interest when recommending the purchase or sale of a specific security.

Pedagogical Objectives:
The objective of this technical note is to highlight the conflict of interests that existed, prior to the changes, at the investment banks with relationships between sell side equity research analysts and investment banking.

published: 01 Jan 1994

  • Topic: Economics & Finance
  • Industry: Insurance
  • Region: Europe

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Abstract:
The case investigates what happened when the French insurance firm AGF acquired a substantial stake in, and tired to acquire a strong influence over, the second largest German insurer, AMB.

Pedagogical Objectives:
To identify some of the central traits of German capitalism, especially the networks of cross-shareholdings linking the major financial institutions. To portray obstacles to 'hostile' takeovers of German firms. To explore the extent to which the "German Model" of capitalism is changing.

published: 01 Oct 2003

  • Topic: Economics & Finance
  • Industry: Food and Beverage
  • Region: Global

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Abstract:
Technological and scientific innovation in recent years has opened many new lines of research and development in the food and beverage industry. Developments in biotechnology in particular have begun to yield new approaches and methods for food production, distribution and consumption, and many more are predicted to emerge in the coming decade. This case looks specifically at the development of genetically modified food products, focusing particularly on the market potential of such innovations and the challenges the industry might expect to encounter going forward.

Pedagogical Objectives:
This case study provides a succinct overview of current developments in this rapidly developing industry sector. Including a historical industry perspective, comment on potential product development and current industry forecasts, the case raises many questions for students to consider and resolve.

Keywords:
Genetically Modified, Genetically Modified Organisms, Gmo, Agriculture, Biotechnology, Patents, Farmers, Food and Agriculture Organisation, Fao, World Health Organisation

published: 27 Feb 2017

  • Topic: Economics & Finance
  • Industry: Education, paper, research
  • Region: Global

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Abstract:
The case focuses on the main issues faced by two US-listed Chinese companies – Orient Paper (NYSE MKT: ONP) and New Oriental Education and Technology Group (NYSE: EDU) – when they were attacked by Muddy Waters, LLC. Interestingly, the seemingly similar responses of the two “Orientals” resulted in widely disparate outcomes, offering lessons to emerging market firms eager to embrace the global capital markets. The case aims to help students understand the mechanism of short selling in the context of “bear” attacks, and expose the problems that attract short sellers’ attention, as well as the actions companies can take to deal with them. It also explains the normative role that short selling plays in the market: to discipline corporate behaviour and improve market efficiency.

Pedagogical Objectives:
The case is suited for any (or all) of the following purposes: 1. To introduce the process of short selling and the parties involved. 2. To identify the common problems that tend to attract “bear” attacks, from the experience of the two Orientals and other examples. Four categories are described in detail. 3. To explore actions that companies can take in dealing with short selling. A bear attack is not necessarily bad for a company; a plunge in the stock price in the short term creates an opportunity for good companies (as well as top management) to legally buy back shares at a lower price. 4. To understand the normative implications of short selling as part of ‘the invisible hand of the market’ to discipline corporate incentives.

Keywords:
Short Selling, ‘bear’ Attacks, Overseas Listing, Global Capital Market, Chinese Companies Overseas Ipo, Corporate Transparency, Invisible Hand, Market Efficiency, Responses to Short Selling, Countering ‘bear’ Attacks

published: 17 Jun 1997

  • Topic: Economics & Finance
  • Industry: Telecommunications
  • Region: Asia

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Abstract:
The corporate cases recount a short history of the companies’ operations in China.

Pedagogical Objectives:
Participants are asked to analyse the corporate mini-cases in groups. The aim is to provide an understanding of business conditions in the telecommunications sector in a China in transition from a collectivist party-state to an authorisation state, with strong regulatory power in the market.

Keywords:
Telecommunications, China, Politics, Public Policy, Corporate Strategy, Entry Strategy, Industrial Competition, Joint Ventures

published: 16 Aug 2007

  • Topic: Economics & Finance
  • Industry: Drugstore retail
  • Region: North America

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Abstract:
The case discuss the accounting of Walgreens and CVS with regards to leases. Both companies operate thousands of stores and account for those assets mostly as lease transactions that are off-balance sheet. The case discuss the companies property, plant and equipment footnote and tries to understand the true health of the companies.

Pedagogical Objectives:
The case was written to cover the accounting for leases session in the financial accounting course. It goes through the two examples of Walgreens and CVS and the companies financial statements and footnote disclosure with regards to leases. The case also provides an opportunity to discuss the Statement of Cash Flows impact using both a direct and indirect statement of cash flows example. (CVS uses a direct statement of cash flows). The case also covers the 4 tests which FASB and IFRS look at to judge whether a lease should be capitalized or not. The case should be assigned with the INSEAD technical note - Accounting for Leases by Professor Cohen and Young.

published: 29 Nov 2007

  • Topic: Economics & Finance
  • Region: Global

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Abstract:
The note addresses accounting for mergers and acquisitions by using the example of P and G's acquisition of Gillette. It explains the accounting journal entries that are recorded in an M and A transaction and the process of calculating goodwill and subsequent impairment.

Pedagogical Objectives:
The note explains the accounting journal entries that are recorded in an M and A transaction, in particular the recognition and measurement of identifiable assets including liabilities and PP and E, intangible assets, in-process R and D, restructuring provisions, contingent liabilities and the process of calculating goodwill and subsequent impairment.

Keywords:
Mergers, Consolidation, Minority Stake, Goodwill, Acquisitions, Accounting, Brands, Intangibles

published: 04 Jan 1997

  • Topic: Economics & Finance
  • Industry: Manufacturing
  • Region: South America

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Abstract:
The purpose of this case is to convey an understanding of the cross-border economic, political and financial risks faced by companies doing business in emerging markets under high-stress conditions. Diagnosis of sources of risk and return and their pricing, interaction between country risk and firm-specific risk, and the interaction between macroeconomic policy and its macroeconomic consequences can be discussed using this case.

Keywords:
Country Risk, Applied Economics, Financial Management, Political Dynamics, Economic Adjustment, Economic Environment

published: 07 Feb 2002

  • Topic: Economics & Finance
  • Industry: Insurance
  • Region: Global

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Abstract:
The global insurance industry is in the process of dramatic transformation. Whereas reinsurance has historically been highly globalized, life and nonlife insurance have traditionally been confined to national markets by legal, tax and regulatory regimes. With some of the major national markets often heavily saturated, major insurance groups have looked aggressively outside their home countries for growth, usually though acquisitions. At the same time, the way insurance has been made available to customers is undergoing significant change, not least through the Internet, even as competition for the insurance industry comes from the capital markets, asset management firms and banks. The industry is in a stage of competitive turmoil, and few pretend to forecast to it will all turn out. This case deals with two of the leading continental European players in the global insurance industry, which has made major acquisitions in the UK, the US and elsewhere in an attempt to be among the most competitive and profitable firms in their industry. The way they are going about this, however, is very different. This case requires students to assess the strategies of AEGON N.V. and Groupe AXA from the perspective of both positioning and execution, and come to a judgment which of them has the greater promise in terms of shareholder value.

Pedagogical Objectives:
Understand the dynamics of competition in global insurance. Distinguish between two very different strategies from the perspective of shareholder value.

Keywords:
Insurance, Financial Services, Competitive Strategy

published: 02 May 2019

  • Topic: Economics & Finance
  • Region: Europe

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Abstract:
The case covers events leading to the hostile bid for AkzoNobel by PPG in 2017, the market response that it prompted, and AkzoNobel’s takeover defenses including the divestment of a business area and large cash payout. Various scenarios (as a standalone, after divestiture and after a takeover with synergies) are considered for the valuation of AkzoNobel, as is the rationale behind the various takeover bids by PPG. The role of activists in triggering the takeover process is highlighted. Alternative payout mechanisms (capital repayment, dividend payment, share buyback) are discussed.

Pedagogical Objectives:
Students learn how to value companies under different scenarios (as a standalone, after a divestiture and after a takeover with synergies) and to interpret market responses to various corporate actions. The case illustrates various takeover defenses, the role of activists, and the dilemma of making a hostile bid in countries where “maximizing stakeholder value” is the cornerstone of governance. It provides the opportunity to discuss different payout mechanisms: dividends vs share buyback, and the less common “capital repayment”.

Keywords:
Takeovers, Hostile Bids, Takeover Defenses, Company Valuation, Activists, Payout Policy, Stakeholder Value Versus Shareholder Value, Akzonobel, Ppg

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