Chestnut Foods stocks performed poorly on the stock-market over a period of time. Therefore they were purchased by activist investor. There is a conflict between the new investor and CFO. The new investor demands selling of Chestnuts high performing division whereas CFO plans to expand this division.
To disentangle the way forwards for Chestnut, pupils are invited to grapple with all the risk-adjusted performance of the approximation of office as well as each division -specific hurdle rates.
Pupils learn to appreciate the importance of using risk-adjusted hurdle rates in creating suitable investment policy. This case was used in Darden's first-year required finance class.
PUBLICATION DATE: August 06, 2015 PRODUCT #: UV7014-PDF-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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