University:
University of Maryland Global Campus
Course:
BMGT 364 | Management and Organization Theory
Academic year:

2019
Views:

464

Pages:

1
Author:

se2bagjuf

Kohler Case Summary 1. What is the goal of the case? Kohler Company is a private family business owned by the Kohler family in Wisconsin. They specialize in manufacturing plumbing items and also produce other appliances such as generators and furniture, 80% of the shares are owned by the family and Kohler restricted the amount of outside shareholders to less than 500. The goal of the case is to f i gure out what the actual value of a Kohler share is. The value of a share claimed by shareholders was $273,000 per share and the share value Kohler said to pay shareholders was $55,400 per share, 2. What are the key questions in the case? What should the price of the stock be? Should Kohler negotiate with outside stockholders? Should Kohler fight with the dissenter group in court. 3. What data would you need to answer these questions? Using the DCF model to f ind Kohler's value: FCFF=EBIT(1-Tax Rate)+ Depreciation- CAPEX-Changes in working capital Calculate the cost of equity: Re=Rf+Beta (Rm-Rf) Calculate the cost of debt: Interest expense/Debt

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