1. Does USX need to be restructured at this time? How much should USX be worth...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
1. Does USX need to be restructured at this time? How much should USX be worth if Steel and Energy are broken apart? 2. Debate the relative merits of Icahn's proposal (spin-off) vs. the company's proposal (targeted stock). For what kinds of companies is targeted stock most appropriate? Least appropriate? 3. What other options should the company consider besides targeted stock or a spin-off? 4. What specific provisions should targeted stock contain to ensure maximum value creation for shareholders? 3 I 2 2 Inventory market valuation credits 3 Selling, general & admin expenses Depreciation, depletion & amort. S Taxes other than income taxes 3 Exhibit 6 5 Exploration expenses Restructuring credit Total operating costs Sales 3 Operating costs Cost of sales I USX: Income Statements, 1988-1990 ($ millions) (cont'd) 6 Total income before income taxes 5 Less provision for U.S. and foreign income taxes Operating income Other income (loss) Interest and other financial income Interest and other financial costs Net income Dividends on preferred stock Net income applicable to common stock 1,990 14,616 10,485 -140 383 1,026 1,552 229 13,535 1,081 -21 34 -315 779 271 508 -14 494 Marathon Group 1,989 12,264 8,507 -145 378 1,029 1,400 165 11,334 930 114 129 -602 571 146 425 -41 384 1,988 9,949 6,699 -23 352 1,006 1,291 191 - 9,516 433 62 92 -499 88 35 53 -39 14 1,990 6,073 5,216 - -97 278 201 5,598 475 58 102 -198 437 127 310 -4 306 U.S. Steel Group 1,989 6,509 5,378 -23 307 207 - 5,869 640 292 93 -238 787 247 540 -17 523 1,988 6,996 5,510 -45 363 236 -50 6,014 982 147 107 -332 904 201 703 -31 672 1,990 15,671 -140 286 1,304 1,753 229 20,659 18,717 16,877 19,103 1,556 37 136 -513 1,216 398 818 -18 USX Consolidated 1,989 800 13,827 -145 355 1,336 1,607 167 17,147 1,570 406 222 -840 1,358 393 965 -58 1,988 907 12,141 -23 307 1,369 1,527 191 -50 15,462 1,415 209 199 -831 992 236 756 -70 686 1. Does USX need to be restructured at this time? How much should USX be worth if Steel and Energy are broken apart? 2. Debate the relative merits of Icahn's proposal (spin-off) vs. the company's proposal (targeted stock). For what kinds of companies is targeted stock most appropriate? Least appropriate? 3. What other options should the company consider besides targeted stock or a spin-off? 4. What specific provisions should targeted stock contain to ensure maximum value creation for shareholders? 3 I 2 2 Inventory market valuation credits 3 Selling, general & admin expenses Depreciation, depletion & amort. S Taxes other than income taxes 3 Exhibit 6 5 Exploration expenses Restructuring credit Total operating costs Sales 3 Operating costs Cost of sales I USX: Income Statements, 1988-1990 ($ millions) (cont'd) 6 Total income before income taxes 5 Less provision for U.S. and foreign income taxes Operating income Other income (loss) Interest and other financial income Interest and other financial costs Net income Dividends on preferred stock Net income applicable to common stock 1,990 14,616 10,485 -140 383 1,026 1,552 229 13,535 1,081 -21 34 -315 779 271 508 -14 494 Marathon Group 1,989 12,264 8,507 -145 378 1,029 1,400 165 11,334 930 114 129 -602 571 146 425 -41 384 1,988 9,949 6,699 -23 352 1,006 1,291 191 - 9,516 433 62 92 -499 88 35 53 -39 14 1,990 6,073 5,216 - -97 278 201 5,598 475 58 102 -198 437 127 310 -4 306 U.S. Steel Group 1,989 6,509 5,378 -23 307 207 - 5,869 640 292 93 -238 787 247 540 -17 523 1,988 6,996 5,510 -45 363 236 -50 6,014 982 147 107 -332 904 201 703 -31 672 1,990 15,671 -140 286 1,304 1,753 229 20,659 18,717 16,877 19,103 1,556 37 136 -513 1,216 398 818 -18 USX Consolidated 1,989 800 13,827 -145 355 1,336 1,607 167 17,147 1,570 406 222 -840 1,358 393 965 -58 1,988 907 12,141 -23 307 1,369 1,527 191 -50 15,462 1,415 209 199 -831 992 236 756 -70 686
Expert Answer:
Answer rating: 100% (QA)
Based on the information provided in the question and the exhibit here are my thoughts on the different points 1 Does USX need to be restructured at this time How much should USX be worth if Steel and ... View the full answer
Related Book For
Posted Date:
Students also viewed these finance questions
-
ABC Limited started the period with 50 unit ofinventory on hand at a cost of 70$ per unit. During the year the following purchases and sales were made. Date Details Quant Buying and ity Selling Price...
-
Let A, B be sets. Define: (a) the Cartesian product (A B) (b) the set of relations R between A and B (c) the identity relation A on the set A [3 marks] Suppose S, T are relations between A and B, and...
-
Let r and s be solutions to the quadratic equation x 2 b x + c = 0. For n N, define d0 = 0 d1 = r s dn = b dn1 c dn2 (n 2) Prove that dn = r n s n for all n N. [4 marks] (b) Recall that a commutative...
-
DrinkOh Limited uses an application service provider to process its payroll. Its employees enter their hours using their smart phones. The payroll clerk collects the smart phone data and transmits it...
-
Use the following contingency table: a. Compute the expected frequency for each cell. b. Compute X2STAT- Is it significant at a = 0.05? oul 50 50-100 00-0 325 A- 23-5 12T
-
In a family of six children, what is the chance that at least three are girls?
-
What characteristics did Perry lack that prevented him from being a transformational leader Perry was one of the worst bosses Lia had ever worked for. Perry had arrived from the main corporate office...
-
Using the following partial listing of T accounts, prepare closing entries in general journal form dated January 31, 20--. Then post the closing entries to the Taccounts. Accum. Depr.- Del. Equip....
-
Using the www.yahoofinance.com site or other site with stock information, choose six firms: two each from three different industries. Gather the following information for each stock: 1) beta for each...
-
The following questions are adapted from a variety of sources including questions developed by the AICPA Board of Examiners and those used in the Kaplan CPA Review Course to study long-term debt...
-
Im looking to answer the following three questions. I have calculated the Boxes to be ordered using the Reorder level Formula (LD+z*(Sigma)*sqrt(L) to give the taget stock level. I have then minues...
-
Simplify the following union and/or intersection. Answer (-4, 8] n [0, 16) Keyboard
-
The controller of Chittenango Chain Company believes that the identification of the variable and fixed components of the firm's costs will enable the firm to make better planning and control...
-
Larry is paid 8.5% of all sales plus 4.25% of all sales over $6800. Find Larry's gross pay from total sales of $12,300.
-
what ways does normative ethical theory provide a framework for evaluating moral decisions, and how does it interact with applied ethics in real-world contexts ?
-
Prima Corporation acquired 7 0 percent interest in Serumpun Corporation on January 1 , 2 0 2 1 for $ 4 2 0 , 0 0 0 in cash, at which time Serumpun's capital structure consisted of capital stock of $...
-
Instructions On July 31, 2017, the balances of the accounts appearing in the ledger of Yang Interiors Company, a furniture wholesaler, are as follows: Accumulated Depreciation-Building Administrative...
-
On the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cashflows: ACCOUNT Land ACCOUNT NO. Balance Date Item Debit Credit Debit Credit...
-
What effect is creation of a single market and a single currency within the EU likely to have on competition within the EU? Why?
-
Research suggests that many expatriate employees encounter problems that limit both their effectiveness in a foreign posting and their contribution to the company when they return home. What are the...
-
After a promising start, MERCOSUR, the major Latin American trade agreement, has faltered and made little progress since 2000. What problems are hurting MERCOSUR? What can be done to solve these...
-
What are the reasons for share repurchases?
-
At the end of the first three months of operation, the trial balance of Metropolitan Answering Service, Inc., appears as shown on the opposite page. Oscar Rienzo, the owner of Metropolitan, has hired...
-
What are the methods of share repurchase?
Study smarter with the SolutionInn App