UST Inc. is a principal producer of moist smokeless tobacco products, controlling roughly 77% of
the overall market, and widely known for its conservative debt policy and high dividend payout.
UST also has an exceptional financi
This spreadsheet supports the SUDENT analysis of the case "Flinder Valves
and Controls Inc." (Case 43).
September 15, 2008
Copyright 2008 by the University of Virginia Darden School Foundation. All rights reserved.
FLINDER VALVES AND CONTROLS IN
1. What are the primary business risks associated with UST Inc.? What are the attributes of UST Inc.?
Evaluate from the viewpoint of credit analyst or bond holder.
UST Inc. is a smokeless tobacco company with a long tradition and a recognizable brand name
1|P a g e
Eskimo Pie Corporation is a frozen novelties company that sells ice cream bars. The company
earns its revenues by licensing the rights to produce Eskimo Pie brand products, sublicensing the
rights to produce Welchs and Heath brand p
CAPITAL BUDGETING WORKSHEET
INPUT SHEET: USER ENTERS ALL BOLD NUMBERS
Revenues in year 1=
Opportunity cost (if any)=
Var. Expenses as % of Rev=
Eskimo Pie Case
January 19, 2006
J. K. Dietrich - FBE 532 Spring 2006
Basic Steps to
Valuation in Finance
Estimate cash flows
Choose a discount rate
Cash - after tax, consumable
Sometimes easy (fixed incomes), sometimes hard
Statement of Purpose: The purpose of this analysis is to
determine if Reynolds Metals (Reynolds) should accept Nestls offer
of $61 million for its holdings of Eskimo Pie. The crux of the issue
is whether or not the projected income from a proposed Initial
Eskimo Pie Corp.
1. What is your estimate of the value of Eskimo Pie Corp as a stand alone company?
Luckily, I checked my e-mail this afternoon, so using a WACC of 16%, an FCF of
$4,004,000, and $13,000,000 cash reserve (pg 593) I came up with this table
Business risk is a variation in operating profits. The level of risk will be affected by 5
factors as followed.
First is the sensitivity of the firms sales to the economic condition. Demand for moist
smokeless tobacco products do not varied wit