Underlying Assumption
There are two possible solutions that we suggest earlier to solve this case, the first one is for Temasek to keep their shares in ABC Learning and the second is to sell it. We have several underlying assumptions to support each of our proposed solutions, that will help us to weigh the cost and benefit of them in order to rationalize our final decision.
For keeping their shares, we have two main reasons. The first one is because Temasek has acquired a significant percentage of ABC Learning ownership, which is 12%. They can utilize their ownership in the annual shareholders meeting by exercising their voting rights to determine company’s direction, especially on matters regarding acquisitions and financing decisions.
In addition to it, they can inquire the management’s incentive plan and assess whether it promotes …show more content…
Decision
After we pointed out our assumptions of each option, we decided to choose option 2, which means suggest Temasek to sell off all of their shares in ABC Learning. We have several justifications for it, the first one is because we aren’t sure that ABC Learning’ share price will going back to the first price point even though Temasek has done all of the actions we assumed in previous section.
Therefore, it’s better for Temasek to sell it straight away at current price rather than spend time and effort, which most likely won’t pay off as they expected.
Second reason is because the nepotism in ABC Learning has rooted for years, we doubt that although Temasek owned 12% of ownership, they might not be able to directly improve or change ABC Learning’s policy, due to there are 88% of shareholders that might not have the same perspective as
There are two possible solutions that we suggest earlier to solve this case, the first one is for Temasek to keep their shares in ABC Learning and the second is to sell it. We have several underlying assumptions to support each of our proposed solutions, that will help us to weigh the cost and benefit of them in order to rationalize our final decision.
For keeping their shares, we have two main reasons. The first one is because Temasek has acquired a significant percentage of ABC Learning ownership, which is 12%. They can utilize their ownership in the annual shareholders meeting by exercising their voting rights to determine company’s direction, especially on matters regarding acquisitions and financing decisions.
In addition to it, they can inquire the management’s incentive plan and assess whether it promotes …show more content…
Decision
After we pointed out our assumptions of each option, we decided to choose option 2, which means suggest Temasek to sell off all of their shares in ABC Learning. We have several justifications for it, the first one is because we aren’t sure that ABC Learning’ share price will going back to the first price point even though Temasek has done all of the actions we assumed in previous section.
Therefore, it’s better for Temasek to sell it straight away at current price rather than spend time and effort, which most likely won’t pay off as they expected.
Second reason is because the nepotism in ABC Learning has rooted for years, we doubt that although Temasek owned 12% of ownership, they might not be able to directly improve or change ABC Learning’s policy, due to there are 88% of shareholders that might not have the same perspective as