Hershey Your submission should be at least three pages long, not including the DCF valuation. Provide a printed, stapled copy including a physical copy of your Excel spreadsheet(s) as an attached exhibit by Tuesday May 22nd 5pm in the Finance department room 201. In addition submit the written portion in an MS Word file to the Tutum assignment in Blackboard. Similarity ratings above 30% will not be accepted. 1. Assume that you are a member of the Hershey Trust board. To whom (or what) do you owe your fiduciary responsibility? How does the legacy of Milton S. Hershey affect your thinking as a member of the board? Discuss the unique challenges presented by the ownership structure of Hershey. 2. Is diversification a valid reason to sell HFC? How would such diversification have served the Hershey School 10 years earlier, for example? 3. Based on your valuation of HFC, do you believe the company was fairly valued by the market before the announcement of the sale? Calculate the WACC for HFC using the data provided in the exhibits, assume a Market Risk Premium of 5.5%. Estimate the stand-alone value of HFC using the free-cash-flow projections provided in case Exhibit1 Discus the non-price considerations of the offers. Which, if any, bid would you vote to accept for the purchase of Hershey Foods Corporation? Is your decision primarily based on the economics of the bids or the desire to honor the legacy of Milton S. Hershey? 4. 5. If you decided to reject both bids and not sell HFC, what will you do to achieve the diversification objective? If you decided to accept one of the bids, what (if anything) would you want to communicate to the constituents who opposed the sale? Hershey Your submission should be at least three pages long, not including the DCF valuation. Provide a printed, stapled copy including a physical copy of your Excel spreadsheet(s) as an attached exhibit by Tuesday May 22nd 5pm in the Finance department room 201. In addition submit the written portion in an MS Word file to the Tutum assignment in Blackboard. Similarity ratings above 30% will not be accepted. 1. Assume that you are a member of the Hershey Trust board. To whom (or what) do you owe your fiduciary responsibility? How does the legacy of Milton S. Hershey affect your thinking as a member of the board? Discuss the unique challenges presented by the ownership structure of Hershey. 2. Is diversification a valid reason to sell HFC? How would such diversification have served the Hershey School 10 years earlier, for example? 3. Based on your valuation of HFC, do you believe the company was fairly valued by the market before the announcement of the sale? Calculate the WACC for HFC using the data provided in the exhibits, assume a Market Risk Premium of 5.5%. Estimate the stand-alone value of HFC using the free-cash-flow projections provided in case Exhibit1 Discus the non-price considerations of the offers. Which, if any, bid would you vote to accept for the purchase of Hershey Foods Corporation? Is your decision primarily based on the economics of the bids or the desire to honor the legacy of Milton S. Hershey? 4. 5. If you decided to reject both bids and not sell HFC, what will you do to achieve the diversification objective? If you decided to accept one of the bids, what (if anything) would you want to communicate to the constituents who opposed the sale
