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Teletech Corporation: Cost of Capital Analysis

Teletech Corporation wanted to understand concepts related to cost of capital, hurdle rates, and EVA to help with changes in its ownership structure and pressure to close business segments. It had questions about why it needs cost of capitals, the appropriate hurdle rates for its two business segments, whether its Products and Systems segment was profitable, and how to respond to a letter from a financial analyst regarding these issues. The document would provide responses to these questions and summarize its overall perspective.

Uploaded by

Farhan Khan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

Topics covered

  • Financial Trends,
  • Products and Systems Segment,
  • Corporate Strategy,
  • Business Valuation,
  • Value Creation,
  • Capital Allocation,
  • Hurdle Rates,
  • Teletech Corporation,
  • Strategic Objectives,
  • EVA Concepts
120 views5 pages

Teletech Corporation: Cost of Capital Analysis

Teletech Corporation wanted to understand concepts related to cost of capital, hurdle rates, and EVA to help with changes in its ownership structure and pressure to close business segments. It had questions about why it needs cost of capitals, the appropriate hurdle rates for its two business segments, whether its Products and Systems segment was profitable, and how to respond to a letter from a financial analyst regarding these issues. The document would provide responses to these questions and summarize its overall perspective.

Uploaded by

Farhan Khan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

Topics covered

  • Financial Trends,
  • Products and Systems Segment,
  • Corporate Strategy,
  • Business Valuation,
  • Value Creation,
  • Capital Allocation,
  • Hurdle Rates,
  • Teletech Corporation,
  • Strategic Objectives,
  • EVA Concepts

Case 15.

Teletech Corporation, 2005


(fictional company)

1. Goal:
To understand Cost of Capitals/Hurdle
Rates
To understand EVA concepts
To understand Risk Adjustment

2. Background:
Changes in ownership structure
Pressure of closing business segments
Estimating reasonable cost of capitals

3. Questions
A. Why we need cost of capitals?
B. What should be the hurdle rates for Teletechs
two business segments?
C. Was the Products and Systems segment really
paying its way?
D. What is your response to Yossarians letter as
one of leading financial analysts?

4. Opinion
Reponses to questions

[Link]
Summary of your stands

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