# 1. How should the EPA rules affect the titanium dioxide business?… 1 answer below »

1. How should the EPA rules affect the titanium dioxide business? (10 Pts.) 2. The pigment division manager says that the objective of the growth strategy is to boost Du Pont’s share of the market to almost 65%. Explain how Du Pont could achieve this goal. (10pts.) 3. When looking at Du Pont’s competitors what is the one thing that they each could do that would make the growth strategy unsuccessful? Support your answer. (10 pts.) 4. Du Pont plans to continue indefinitely in the titanium dioxide business. So you need to determine a terminal value in 1985 for each strategy. Write out the formula you are using to determine the terminal value and clearly provide the numbers you are using to make your calculation. The Du Pont Corporation believes that its cost of capital is 13%. You might not want to use this number. If you think there is a better number to use when discounting, you should use it. In 1972 government bond yields were 1 yr. = 4.75%, 10 yr. = 5.95% and 20 yr. = 6.25%. Do not use the value of Du Pont’s total investment in net working capital to determine the terminal values. A. What is the terminal value for the maintain strategy in 1985? (10 pts.) B. What is the terminal value for the growth strategy in 1985? (10 pts.) C. If Du Pont decides to select the maintain strategy, what is the net present value of this ““`investment? (10 pts.)

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