Product details

Share this page:
Please find below the full details of the product you clicked a link to view.
Case
-
Reference no. UVA-F-1736
Published by:
Darden Business Publishing (2015)
Version:
15 September 2017
Length:
10 pages
Data source:
Published sources
Abstract:
After a period of poor stock-market performance, conglomerate Chestnut Foods (Chestnut) faces the acquisition of its stock by an activist investor. The new investor demands the sale of Chestnut's high-growth division, which contrasts with the CFO's turnaround plan to expand this same division. To disentangle the way forward for Chestnut, students are invited to grapple with the risk-adjusted performance of each division and the estimation of division-specific hurdle rates. Students learn to appreciate the importance of using risk-adjusted hurdle rates in establishing appropriate investment policy. This case has been used in Darden's first-year required finance course. It is designed to be used within a module on estimating the cost of capital, but only after students have become familiar with the basic techniques for estimating a weighted average cost of capital.
SHARE
View our pricing guide
or to see prices.