Objectives
1. To explore what goes into making financial policy in a highly innovative sector.
2. To evaluate how financial policies ought to change when a firm matures into a cash cow form a start up.
3. To consider and contrast a variety of cash disbursement policies: dividends, share repurchases, and more complex security offerings.
Substantive issue
The Microprocessor Business
1. Background on the computer business:
What is driving the changing competitive structure of the microprocessor market?
2. Evolution of the microprocessor industry
Whether Intel could have afforded the costs of development and production of the i386, i486, P5 and ultimately P6 if its share of the market remained similar to that of its earlier microprocessor (i.e. the i8088, i8086, and i80286)
Are rising fixed costs the only mechanism pushing the microprocessor industry toward consolidation?
What does the importance of expectations for the Intel’s product market success mean?
3. First versus second-mover advantages in microprocessors:
What a first-mover (like Intel) advantage has going for it when up against a second-mover (like AMD, NexGen) when product horizons are relatively short. Make lists of the relative strengths and weaknesses of each position and discuss them.
4. The competitive role of financial flexibility
What is the role of Intel’s cash and substantial financial slack
Give a numerical example of temporary versus permanent threats of entry
Other costs and benefits to holding cash
1. Taxes?
What about tax shields?
2. Agency issues
What is the cost of holding cash?
3. Signaling
Could probably Intel increase its current share price by signaling management’s belief of a strong future through a dividend or (better yet) hare repurchase?
4. Timing
Intel has used timing against the market as a source of long-run value for shareholders who remain with the firm.
Cash disbursement policies
1. Stock repurchases
Which is the better stock repurchases methods of fixed-price tender offers, Dutch auctions and open-market repurchases?
2. Dividends
What about Intel’s dividends policies?
A corporation’s policy regarding paying out cash to its shareholders holding constant its investment and borrowing decisions, what about the Intel
Put-Warrant dividend and convertible-bond offering
1. What is motivation of this strategy?
这个是问题 案例有几十页 貌似跟报表关系不大
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