chestnut-ambudheesh-naina-shiny-sudhanshu compress.pdf -...

FINANCE MANAGEMENT
CASE STUDY ANALYSIS
Chestnut Foods
Pre read Assignment
Ambudheesh Parasar (G19005)
Naina Rustagi (G19024)
Shiny Panigrahi (G19041)
Sudhanshu Shekhar (G19044)
Date of Submission:28.08.2019
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CONTENTS
1.0 CASE BACKGROUND ............................................................................................................. 3
2.0 CRITICAL queries and answers ............................................................................................... 3
3.0 ANALYSIS And INTERPRETATION ....................................................................................... 5
4.0 recommendations .................................................................................................................. 8
5. References .............................................................................................................................. 8
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1.0
CASE BACKGROUND
The Chestnut foods corporation had two main business segments. The first business segment
was Food products division which produced broad range of fresh , packaged and processed
foods for retail and food services. The second business segment was instruments division which
delivered systems and specialized equipment used in the processing and packaging of food
products.The stock market performance of Chestnut foods corporation had started declining
and CFO Brenda Pedersen wanted to reverse the trend. Rollo Van Murr, who was a high-
profile activist investor had purchased 10 % stake in chestnut and was asserting the rights to
two seats on the board. He also recommended to sell off the Instruments division to keep the
focus on food division as speciality bread and pretzel market were Chestnut’s primary driver of
growth.
2.0 CRITICAL QUERIES AND ANSWERS
1. What is hurdle rate in capital budgeting?