HBS Hill Country Snack Foods Co. case study question(힐컨트리)

소개

harvard business review의 Hill country Snack Foods Co., 케이스의 question에 대한 문제들에 대한 풀이입니다.

목차

1-i) How much business risk does Hill Country face?
1-ii) briefly discuss the current corporate culture;
1-iii) How does the stock market evaluate Hill Country’s current situation compared to its peers in the same industry
1-iv) Discuss how much financial risk the company would face at each of the three alternative debt-to-capital ratios presented in case Exhibit 4 (you may discuss based on the financial risk faced by firms with different credit ratings)
1-v) How much value could Hill Country create for its shareholders at each of the three alternative debt levels?

2-i) What debt to capital structure would you recommend as optimal for Hill Country Snack Foods? 2-ii) Why?
2-iii) What are the advantages of adding debt to the capital structure even when the company does not require debt finance because it generates sufficient internal funds to support operations and growth?
2-iv) What are the disadvantages?
2-v) How would the financial markets react if the company increased its financial leverage?
2-vi) What would happen to the P/E ratio?

3-i) What alternative methods could be used to increase debt and decrease equity?
3-ii) Which method do you recommend?

4-i)Considering Hill Country’s corporate culture, what arguments could you use to persuade CEO Keener or his successor to adopt and implement your recommendation?

본문내용

1-i) How much business risk does Hill Country face?
Generally Hill Country’s business risk is not big. It produces a variety of snacks for Southwestern flair as well as traditional snack foods through various channel and its sales growth go up steadily by its efficient operations; quality products; strong position, etc. Furthermore, its rapid feedback in the rapidly changing made its continuous success in business.
But, growing cash position, absence of debt finance, and large equity balance made it difficult to earn a high ROE and ROA. It’s also risk that CEO’s personal preference had a substantial influence on company culture.
1-ii) briefly discuss the current corporate culture;
First Keener and other management insider held a 1/6 shares of Hill Country's company. It's very significant amount. It mean’s that the benefit of the company is connected to Keener and other management.
Second, another unique corporate culture is environment. This industry market is very fierce competition and rival.

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