Essay about Continental Carriers
Continental Carriers, Inc., (CCI) is known as a regular commodities motor carrier. Since its inception, it has experienced continuous growth in revenues and mastered the strategic reduction of operating costs. It soon became known in the trucking industry as a widely profitable key player.
In order to sustain continuous growth in revenues and income, management has decided that key acquisitions need to be made.
The top contender, Midland Freight, Inc., a common carrier company would expand CCI’s route system. The prospect company also demonstrated congruence with the type of marketing and cost reduction programs that ushered CCI’s growth. The owners of Midland agreed to sell it for $50 million in …show more content…
Other directors also had their own reservations regarding the issue of new common stock. They argued that CCI stock was currently undervalued giving new stockholders a lucky strike whilst diluting the voting control of existing management. Also, issuing new stock would decrease EPS to $2.72.
Other directors also suggested the option of issuing preferred stock.
II. Problem Definition
Faced with the approved acquisition plan of Midland Freight, Continental Carriers must determine its best financing source. Under the leadership of Elizabeth Thorp, the best alternative must be presented to the board of directors given the numerous concerns brought up during the past meeting.
III. Decision Framework