This course is Corporate Valuation

Long Essay (1-2 pages double spaced)

It is often stated by economists that inflation can destroy the long-term value of companies. In a 1-2 page essay, describe exactly how inflation does this. Use your case study as an example (The case study is Eskimo Pie) to show the destruction of value. Also, under what circumstances, or unique characteristics of firms position the firm to perform well in an inflationary environment? Finally, if a company's earnings grow at the same rate as inflation, is that sufficient to fend off inflation's value destroying effects?