Case Study: Ford Motor Company’s Value Enhancement Plan (VEP) As was announced during the first class in January (and stated in the module outline) you are required to submit a written assignment. Your assignment will be based on the Harvard Business School case study entitled “Ford Motor Company’s Value Enhancement Plan (A)”. The case study is distributed separately. Specifically, you are required to read carefully the case study and hand in your answer to the following two questions: 1. Should Ford: §? go ahead with the complicated VEP, or §?
issue a cash dividend, or §? conduct a share repurchase? In other words, would you vote in favour or against the VEP plan? Explain. 2. If the VEP plan is implemented, what would be your choice (cash or shares or a combination) if you were one of the following: §? a Ford family member holding Class B shares §? an institutional investor, such as TIAA-Cref or the Calpers §? a regular outsider shareholder You must provide a short answer for all three investor types above. Assessment weight: This assessment constitutes 20% of your final mark.
Deadline: You must submit your assignment via my. wbs by 12:00 pm on Monday 15 April, 2013. Late submissions will receive penalties in line with WBS policy. Format Your answer to the questions above should follow these guidelines: 1. 2. 3. 4. Your answer should be no more than 2 pages long. Any pages beyond the first two will be detached and discarded. This limit applies to all work, including any graphs, tables or appendices you may choose to use. Your paragraphs should be single-spaced with appropriate headings.
You must use Times New Roman font 12. You should use the official assignment cover sheet, which will not count towards the two-page limit. The cover sheet should state the module name and number (IB 9380), the case study title and your student number. MiM Corporate Finance 1 Ford’s Value Enhancement Plan General advice You are strongly encouraged to write your answer using the following principles: You can assume that the marker is fully aware of all the facts of the case as well as all the material taught in class.
You do not need to introduce the issues, provide background information or repeat any of the information cited in the case, unless you wish to support a very specific argument. You are asked to write your own opinion about the issues you believe are important in this case. Be as precise as possible. Try as hard as you can to avoid being descriptive and instead provide your own analysis. All your arguments should be based on the material discussed in class, the textbook readings and the facts and opinions discussed in the case.
Marks will be given for the quality of your thought and presentation. Please take a clear stand in everything you discuss. An argument of the form “yes, …but” or “on the one hand yes…, but on the other hand no…” will not do and will receive low marks. Remember, while there is no such thing as a wrong argument, there is a poorly supported argument. Finally, note that you are expected to work on the case individually. You may discuss the basic ideas of the case with your classmates, but you must write your answer to the assignment on your own. This is not a group assignment.