MBA 542: Managerial Finance

Individual Case Report

 

STUDENT NAME:

 

Requirement (please read carefully):   1.  Your grade will be based on your understanding and critical thinking, i.e. your opinion. –       Each question is worth 10 points. –       Your answer needs to be thorough and in detail. Please aim at answering each question for about half to one page (single-spaced). –       There are 6 cases in the class and there are 2 questions per case. You should choose 4 out of the 6 cases and answer the 2 questions for the 4 cases. If you choose more than 4 cases, your grade will be based on the first 4 cases being discussed. –       Your answers should be mostly based on the cases, our class discussions, and your own critical thinking. Please do not use external references.   2.  Your answers must be typed below each question. –       Formatting: Single spaced, Times New Roman, 12 font, 1″ margins –       References: APA 7th edition. http://libguides.twu.ca/c.php?g=284731&p=1897471 –       Failure to meet the requirements will result in a minimum of 10% points deducted.   3.  TWU considers it a serious offense when an individual attempts to gain unearned academic credit. Please make sure you read and understand the TWU Academic Integrity document posted on Moodle. –       Your submission will be checked using TurnItIn where originality will be checked against other students’ submissions and anything available on the Internet. –       I only look at the similarity of your answers to online content and submissions. I will not consider the overall similarity score itself or the similarity in the question part. –       Any submission that is deemed to contain plagiarized material will receive an “F” mark.

 

 

Case 1: The Walt Disney Company’s Stock: Buy, Hold, or Sell?

1. Read Exhibits 1-5, 7 and 8:

• Discuss the strengths and weaknesses of Disney’s financials compared to Netflix, Comcast, and Viacom.
• Discuss Disney’s valuation compared to Netflix, Comcast, and Viacom.

(note: you do not need to worry about the Treasury Bill yield)

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2. In the place of Crowley in December 2019 (the time of the case), based on the investment strategy of GARP, would you buy, hold, or sell Disney? Explain your answers.

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Case 2: Tesla’s Bid for SolarCity

1. Financial analysis using Exhibits 8 and 11

• Based on Exhibit 8: what are the key weaknesses of Tesla’s financials?
• Based on Exhibit 11: what are the key weaknesses of SolarCity’s financials?

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2. If you were a shareholder of Tesla’s, would you vote yes or no for the merger at the time of the case? Why?

Note: your answers above should consider the strategic and operational synergies, financials, market conditions, and valuations of the merger.

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Case 3: Toys “R” Us: Come Buy More Toys

1. Based on the case, what caused Toys R Us to fail? What could be done differently to possibly create a different outcome?

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2. Who bears the risks in a private equity transaction? Should or will the government take a more active role in overseeing private equity activity as a result of bankruptcies like Toys R Us?

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Case 4: Delta Air Lines: Navigating the COVID-19 Storm

1. Based on the information you read from the case and Exhibits 2 & 6 & 9: compare Delta with its key competitors and discuss the strengths and weaknesses of Delta before and during COVID.

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2. Summarize what Delta did to reduce the cash burn from $100 million per day to $27 million per day. Now consider the 5 options the company faced, what option should Delta pursue?

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Case 5: Investing in a Unicorn: The Case of Lucking Coffee Gone Rogue

1. Describe the narrative that Luckin used to attract investors. What made it appealing to investors before, during, and after the IPO? Please ensure your answers discuss Luckin’s business model and financials (Exhibits 3 &12).

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2. Using the information available on August 15, 2020, if you had shares in Luckin, would you retain or sell your shares? Justify your position.

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Case 6: The Harder We Fall: The We Company’s 2019 IPO Fiasco

1. WeWork’ business model & Financials
   • Discuss WeWork’s business model: what are its strengths and weaknesses?
   • Read Exhibit 4: Discuss the key issues observed in We Company’s Income Statement.

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2. WeWork’s Failure
   • Summarize the reason behind WeWork’s failure.
   • What have you learned from this case from a start-up company’s perspective?
   • What have you learned from this case from an investor’s perspective?

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