Presentasi Kasus (Mr Thorndike)
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Transcript of Presentasi Kasus (Mr Thorndike)
The Shocking Demiseof Mr. Thorndike
WM 69
Presented By:Arie FrederikFaula Iman SitompulHarish Adrian RiyantoIestin SB TambaLouisa Zephania Lukas
Mr. Rupert Thorndike, autocratic
CEO of Thorndike Oil, found
dead
Case Summary
The company’s capital structure as follows:• 5% debentures:
– $250 million face value– Mature in 10 years with 12% yield
• Stock:– 30 million shares– Closed at $9 a share the day before the murder
• 10% subordinated convertible notes:– Mature in 1 year and are convertible at any time
at a conversion ratio of 110.– Priced at 5% more than their conversion value
the day before the murder
Case Summary
Other information:• Before the murder, Mr. Thorndike was offered the
following:• All common stock would be bought off at $10 a
share• All debts issued would be paid off at face value• Holders of convertible notes could choose to
convert their shares
Case Summary
Case Summary
In $m 5% Debentures(Face Value)
Shares of Stock
10% Convertible Notes
(Face Value)
Doris 4 1.2 0
John 0 0.5 5
Patsy 0 1.5 3
Who stood to gain the most from his death?
5% Debentures – Before the Murder
Year
Annual Cash Flow(5% x $250
million)
PV(CF / (1+0.12)^t)
1 12,500,000.00 11,160,714.29
2 12,500,000.00 9,964,923.47
3 12,500,000.00 8,897,253.10
4 12,500,000.00 7,943,975.98
5 12,500,000.00 7,092,835.70
6 12,500,000.00 6,332,889.01
7 12,500,000.00 5,654,365.19
8 12,500,000.00 5,048,540.35
9 12,500,000.00 4,507,625.31
10 262,500,000.00 84,517,974.61
Total 151,121,097.00
0.604
PV at 12% of the 5%
coupon for 10 years,
plus repayment
of face value at year 10, is 60.4% of the $250 million
face value, or $151.12
million
5% Debentures – After the Murder
• $250 million face value, all paid off• Gain in market value of 39.6% (100% –
60.4%)
Stocks – Before and After the Murder
• Before: $270 million ($9 per share)• After: $300 million ($10 per share)• $1 Gain in market value ($10 - $9)
Convertible Notes – Before and Afterthe Murder
Before:• $990 per $1,000 note (110 x $9)• The bonds were trading at 1.05×990 =
$1,039.50• 103.95% of face valueAfter:• $1,100 per $1,000 note (110 x $10)• 110% of face value• Thus, the notes increase by 6.05% of face
value (110% – 103.95% )
Case Solutions
Before After Gain in Value
Debentures $151.12 million(60.4% of face value)
$250 million(100% of face value)
39.4%(100% - 60.4%)
Common Stock
$270 million ($9/share)
$300 million ($10/share)
$1($10 - $9)
Convertible Notes
103.95% of face value
110% of face value
6.05%(110% - 103.95% )
Case Solutions
In $m Doris John Patsy
5% Debentures(Face Value)
1.584(0.396 x 4) 0 0
Shares of Stock 1.2(1 x 1.2)
0.5(1 x 0.5)
1.5(1 x 1.5)
10% Convertible Notes(Face Value)
00.3025
(0.0605 x 5)
0.1815(0.0605 x 3)
Total 2.784 0.8025 1.6815
Doris gains the most from Thorndike’s death and receives $2.784 million in total