temple third lesson winter 2011

8/7/2019 Temple Third Lesson Winter 2011

1/30

DRAMATIC TENSIONDRAMATIC TENSION

How to use word selection andHow to use word selection andstrong grammatical structures tostrong grammatical structures to

build drama that grabs and holdsbuild drama that grabs and holdsreaders.readers.


2/30

The World in Three ActsThe World in Three Acts

The same basic writing structure:The same basic writing structure:

JournalismJournalismTV CommercialsTV CommercialsNovelsNovels

ScreenplaysScreenplaysLiteratureLiterature


3/30

Act 1Act 1

Introduce the characters or key elementsIntroduce the characters or key elements

Act IIAct II

Develop the characters, introduce theDevelop the characters, introduce theconflict, develop the conflictconflict, develop the conflict

Act IIIAct IIIResolve the conflict, provide a solutionResolve the conflict, provide a solution

and/or conclusionand/or conclusion


4/30

Romeo & JulietRomeo & JulietRomeo meets Juliet and falls in love because sheRomeo meets Juliet and falls in love because she

looks better than her sister, even though theyre fromlooks better than her sister, even though theyre fromwarring families.warring families.

They secretly marry, but people find out and startThey secretly marry, but people find out and start

trying to expose them, while Juliets father unwittinglytrying to expose them, while Juliets father unwittinglyplots to marry her to another man.plots to marry her to another man.

Juliet tries to escape her family by faking her death,Juliet tries to escape her family by faking her death,but the plan to inform Romeo fails. Romeo comes tobut the plan to inform Romeo fails. Romeo comes to

believe Juliet is dead, so goes to her fake deathbed andbelieve Juliet is dead, so goes to her fake deathbed andcommits suicide. Juliet wakes up, discovers Romeoscommits suicide. Juliet wakes up, discovers Romeosdeath and then kills herself for real.death and then kills herself for real.


5/30


6/30

Bankers & Consultants VideoBankers & Consultants VideoAct IAct IBankers think of themselves as the most elite professionalsBankers think of themselves as the most elite professionals

on Wall Street because they are paid a lot and like toon Wall Street because they are paid a lot and like toshow off their money. Consultants believe they haveshow off their money. Consultants believe they have

more rewarding careers overall.more rewarding careers overall.Act IIAct II

Members of the two groups confront each other on theMembers of the two groups confront each other on thestreet and stage a rapping contest to see who canstreet and stage a rapping contest to see who canhumiliate other best in rhyme to a beat.humiliate other best in rhyme to a beat.

Act IIIAct III

Bankers defeat the consultants by demonstrating theirBankers defeat the consultants by demonstrating theirsupreme confidence in themselves in an amusing mix ofsupreme confidence in themselves in an amusing mix ofrap rhymes and finance business slang.rap rhymes and finance business slang.


7/30

Seven SamuraiSeven Samurai

Bandits threaten a village, which has no weaponsBandits threaten a village, which has no weaponsand little fighting skill to defend itself.and little fighting skill to defend itself.

The villagers cannot easily hire samurai to defend them,The villagers cannot easily hire samurai to defend them,

because they have little money and, in the past, samuraibecause they have little money and, in the past, samuraihave raped their daughters. They decide to find samuraihave raped their daughters. They decide to find samuraiwho work cheaply, and after they succeed, the samuraiwho work cheaply, and after they succeed, the samuraiarrive only to be disappointed that they are not warmlyarrive only to be disappointed that they are not warmlygreeted by locals.greeted by locals.

The samurai and villagers learn to trust each otherThe samurai and villagers learn to trust each otherand thereby defeat the bandits.and thereby defeat the bandits.


8/30

Typical M&A DealTypical M&A Deal

Act 1Act 1Company A buys company B to gain company BsCompany A buys company B to gain company Bs

revenue and assets.revenue and assets.Act IIAct II

Company A had to pay an amount that some sayCompany A had to pay an amount that some saywas too high and others say was a good deal.was too high and others say was a good deal.The new merged company will face challengesThe new merged company will face challengesx,yx,y and z in their industry.and z in their industry.

Act IIIAct III

People in a position to know and who have aPeople in a position to know and who have atrack record of being right say the merger was atrack record of being right say the merger was agood idea, or say it was a bad one.good idea, or say it was a bad one.


9/30

Sources of Dramatic Tension in Financial WritingSources of Dramatic Tension in Financial Writing

ConflictConflict winners and losers, follow the money,winners and losers, follow the money,past versus futurepast versus future

SurpriseSurprise you thought this, but thatyou thought this, but that

ImportanceImportance first, most, last, least, best, worstfirst, most, last, least, best, worst


10/30

Business & Finance Writing Winter 2010Business & Finance Writing Winter 2010 1010

Lesson 2 ReviewLesson 2 Review

Verbs and nounsVerbs and nouns

ConcreteConcrete vsvs abstractabstract

SpecificSpecific vsvs vaguevague SimpleSimple vsvs complicatedcomplicated

FamiliarFamiliar vsvs unfamiliarunfamiliar

Layman's termsLayman's terms vsvs jargonjargon


11/30

EpistemologyEpistemology

How do we know what we knowHow do we know what we know

Source, attribution, quotationSource, attribution, quotation

Who isWho is your reader?your reader?


12/30

Company X drew up a plan for acquisition ofCompany X drew up a plan for acquisition ofcompany Z. The strategy was to make money from thecompany Z. The strategy was to make money from thegap between book value and market value. However,gap between book value and market value. However,the due diligence failed to identify critical issues. Thethe due diligence failed to identify critical issues. Thecompany Z had risk of rise in labor cost and expense,company Z had risk of rise in labor cost and expense,and reduction of assumed operating income.and reduction of assumed operating income.

The company X formed working team to address theThe company X formed working team to address theissues and accelerate the process.issues and accelerate the process.

The team will also discuss potential integrationThe team will also discuss potential integration

challenges. The major concerns include cultural dividechallenges. The major concerns include cultural dividebetween the companies and delay of the schedule duebetween the companies and delay of the schedule dueto possible delay in filing processto possible delay in filing process..

Homework Review


13/30

Company X plans to buy company Z for less than itsCompany X plans to buy company Z for less than its

book value.book value. X will pay $30 billion in cash and assumed debt forX will pay $30 billion in cash and assumed debt for

Z, which is valued at $50 billion based on the differenceZ, which is valued at $50 billion based on the differencebetween its tangible assets and liabilities, company Xbetween its tangible assets and liabilities, company Xsaid in a statement to the Turkish stock exchange today.said in a statement to the Turkish stock exchange today.

The acquisition may reduce company Xs profitThe acquisition may reduce company Xs profitbecause companybecause company zszs rising labor costs and otherrising labor costs and otherexpense. The two companies may also haveexpense. The two companies may also haveincompatible corporate cultures and delays in completingincompatible corporate cultures and delays in completing

the deal. Company X has formed a managementthe deal. Company X has formed a managementcommittee to take on these challenges.committee to take on these challenges.


14/30

Cadburys board today advised its shareholders toCadburys board today advised its shareholders toaccept a takeover bid from Kraft that values the Britishaccept a takeover bid from Kraft that values the Britishchocolate maker at 11.5 billion ($18.9 billion). The dealchocolate maker at 11.5 billion ($18.9 billion). The dealwill make Kraft the worlds largest confectionarywill make Kraft the worlds largest confectionarycompany. While Cadburys chairman Roger Carr said thecompany. While Cadburys chairman Roger Carr said theoffer represented good value for shareholders, unionoffer represented good value for shareholders, union

leaders warned of job losses ahead.leaders warned of job losses ahead.

The agreement follows four months of acrimoniousThe agreement follows four months of acrimoniousnegotiations. In September, Kraft issued a hostile bid ofnegotiations. In September, Kraft issued a hostile bid of769 pence per share, valuing the company at 10.5769 pence per share, valuing the company at 10.5billionbillionan offer that was described by Carr asan offer that was described by Carr as

derisory.derisory.


15/30

Krafts overtures have been controversial on both sides of the Atlantic. LordKrafts overtures have been controversial on both sides of the Atlantic. LordMandelsonMandelson, Britains Business Secretary said, If you think that you can, Britains Business Secretary said, If you think that you cancome here and make a fast buck you will find that you face huge oppositioncome here and make a fast buck you will find that you face huge opposition

from the local population . . . and from theB

ritish government.B

y contrast,from the local population . . . and from theB

ritish government.B

y contrast,Warren Buffet, whose US investment firm Berkshire Hathaway is a largeWarren Buffet, whose US investment firm Berkshire Hathaway is a largeshareholder in Kraft, warned the company not to pay too much for Cadbury.shareholder in Kraft, warned the company not to pay too much for Cadbury.

Under the terms of todays bid, Kraft will pay 500 pence in cash and offerUnder the terms of todays bid, Kraft will pay 500 pence in cash and offer0.1874 new Kraft shares for each Cadbury share. That is the equivalent of0.1874 new Kraft shares for each Cadbury share. That is the equivalent of

840 pence per share, representing a premium of nearly 50 percent over the840 pence per share, representing a premium of nearly 50 percent over theprice of Cadbury shares in early September.price of Cadbury shares in early September.

Kraft will borrowKraft will borrow 7 billion ($11.5 billion) to finance the deal. Jennie Formby7 billion ($11.5 billion) to finance the deal. Jennie Formbyof the Unite union warned that this level of leverage would lead to pressureof the Unite union warned that this level of leverage would lead to pressureto increase revenues and reduce labor costs. "The sad truth is that whento increase revenues and reduce labor costs. "The sad truth is that when

they have to pay down that debt, the soft option is jobs and conditions, shethey have to pay down that debt, the soft option is jobs and conditions, shesaid.said.

Kraft predicted annual cost savings of $675 million as a result of the tie up,Kraft predicted annual cost savings of $675 million as a result of the tie up,but has not yet given any assurances to Cadburys 4,500 employees in thebut has not yet given any assurances to Cadburys 4,500 employees in theUK.UK.


16/30

Cadburys board today advised its shareholders to accept an increasedCadburys board today advised its shareholders to accept an increasedtakeover bid from Kraft that values the British chocolate maker at 11.5takeover bid from Kraft that values the British chocolate maker at 11.5billion ($18.9 billion) after rejecting an initial offer as too low.billion ($18.9 billion) after rejecting an initial offer as too low.

The offer represented good value for shareholders, said CadburyThe offer represented good value for shareholders, said CadburyChairman Roger Carr. Kraft bid 500 pence in cash and 0.1874 in new KraftChairman Roger Carr. Kraft bid 500 pence in cash and 0.1874 in new Kraftshares for each Cadbury share, an offer worth 840 pence per share, ashares for each Cadbury share, an offer worth 840 pence per share, apremium of about 50 percent on the U.K. candy makers earlypremium of about 50 percent on the U.K. candy makers early--SeptemberSeptembershare price.share price.

The deal would make Kraft the worlds largest confectioner and cutThe deal would make Kraft the worlds largest confectioner and cut

annual costs by $675 million, according to the companys own estimates.annual costs by $675 million, according to the companys own estimates.Negotiations lasted four months with Carr describing an earlier offer asNegotiations lasted four months with Carr describing an earlier offer asderisory. Unions and British political leaders said they oppose the dealderisory. Unions and British political leaders said they oppose the dealbecause Kraft plans to saddle Cadbury with debt to pay for the transactionbecause Kraft plans to saddle Cadbury with debt to pay for the transactionand may cut jobs.and may cut jobs.

Kraft will borrowKraft will borrow 7 billion to help pay for the company.7 billion to help pay for the company.

The use of leverage would lead to pressure to increase revenue andThe use of leverage would lead to pressure to increase revenue andreduce labor costs, said Jennie Formby of the Unite union.reduce labor costs, said Jennie Formby of the Unite union.

"The sad truth is that when they have to pay down that debt, the soft"The sad truth is that when they have to pay down that debt, the softoption is jobs and conditions.option is jobs and conditions.


17/30

The Unite labor union and the U.K.s businessThe Unite labor union and the U.K.s businesssecretary said the Kraft takeover bid approved bysecretary said the Kraft takeover bid approved by

Cadburys board today would saddle the confectionerCadburys board today would saddle the confectionerwith too much debt, kill jobs and stir political opposition.with too much debt, kill jobs and stir political opposition.

If you think that you can come here and make aIf you think that you can come here and make afast buck you will find that you face huge oppositionfast buck you will find that you face huge opposition

from the local population . . . and from the Britishfrom the local population . . . and from the Britishgovernment, Lordgovernment, Lord MandelsonMandelson, Britains Business, Britains BusinessSecretary said.Secretary said.


18/30

Kirin Holdings Company, Limited ("Kirin")announced that the merger negotiations with Suntory

Holdings Limited ("Suntory") had been terminated onFebruary 8, 2010. Kirin had been discussing theconditions of the contract with Suntory for the newentity that would be a listed company in order toensure appropriate management independence.

However, it became apparent that Suntory held adifferent view on this matter that Kotobuki Realty Co.,Ltd. (Kotobuki Realty), which owns 89.32% ofSuntorys outstanding share and substantially takescontrol of Suntory, would have more than 1/3 of newentitys outstanding share and the greatest power ofthe new entity subject to the stock exchange ratio setat 1 share of the new entity for each share of Kirin andSuntory.


19/30

Kotobuki Realty is owned by Suntorys founding familyKotobuki Realty is owned by Suntorys founding familythrough possession of approximately 81.57% privatethrough possession of approximately 81.57% private

equity. The stock exchange ratio should be decidedequity. The stock exchange ratio should be decidedthrough due diligence to the book value of eachthrough due diligence to the book value of eachcompany in many cases for fairness, but the differencecompany in many cases for fairness, but the differenceof shareholders composition between Kirin and Suntoryof shareholders composition between Kirin and Suntoryis much more critical factor to consider the fairness ofis much more critical factor to consider the fairness of

the stock exchange ratio in this case.the stock exchange ratio in this case.Kirin determined to terminate the negotiations, becauseKirin determined to terminate the negotiations, because

they were unlikely to result in the establishment of thethey were unlikely to result in the establishment of thenew entity that would fulfill Kirin's aim of developing as anew entity that would fulfill Kirin's aim of developing as a

leading global company, but Kirin also announced thatleading global company, but Kirin also announced thatthey would keep a cooperative relationship with Suntorythey would keep a cooperative relationship with Suntoryin terms of the shared logistics system.in terms of the shared logistics system.


20/30

Kirin Holdings Company, Limited ("Kirin") terminated merger negotiationsKirin Holdings Company, Limited ("Kirin") terminated merger negotiationswith Suntory Holdings Limited ("Suntory") after the two failed to agree onwith Suntory Holdings Limited ("Suntory") after the two failed to agree onthe capital structure.the capital structure.

Kirin PresidentTsutomuKirin PresidentTsutomu HataHata said the company ended talks withsaid the company ended talks withSuntory because, under the terms of the proposed acquisition, SuntorySuntory because, under the terms of the proposed acquisition, Suntorywould have held more than 1/3 of the merged companys shares, giving itwould have held more than 1/3 of the merged companys shares, giving itcontrol, through Kotobuki Realty Co., which owns almost 90 percent ofcontrol, through Kotobuki Realty Co., which owns almost 90 percent ofSuntory.Suntory.

The deals failure underscores Kirins difficulties in finding a partner toThe deals failure underscores Kirins difficulties in finding a partner to

help it expand globally to compete with the worlds largest brewers andhelp it expand globally to compete with the worlds largest brewers andfoodmakersfoodmakers..

``Our plans to compete globally with the worlds biggest food and``Our plans to compete globally with the worlds biggest food andbeverage makers will require a capital structure that is broader and deeperbeverage makers will require a capital structure that is broader and deeperthan would be the case with a company formed by merging with Suntory,than would be the case with a company formed by merging with Suntory,HataHata told reporters today in Tokyo. He also said Kirin would keep continuetold reporters today in Tokyo. He also said Kirin would keep continue

to cooperate with Suntory in shipping, deliveries and raw materialsto cooperate with Suntory in shipping, deliveries and raw materialsprocurement.procurement.


21/30

Dividend yieldDividend yield

Annual dividends per share divided by theAnnual dividends per share divided by theshare price and expressed as ashare price and expressed as apercentage.percentage.


22/30


23/30

Outperform/UnderperformOutperform/Underperform

To perform better than. Usually refers toTo perform better than. Usually refers toperformance that is better than anperformance that is better than anindex or average that includes rivalindex or average that includes rivalsecurities or assets.securities or assets.


24/30

FloatFloat

The number of shares available to the public.The number of shares available to the public. Float isFloat iscalculated by subtracting the shares held by insiders,calculated by subtracting the shares held by insiders,and those deemed stagnant shareholders, from the totaland those deemed stagnant shareholders, from the totalshares outstanding. Stagnant shareholders includeshares outstanding. Stagnant shareholders includeEmployee Stock Ownership Plans, employee benefitsEmployee Stock Ownership Plans, employee benefitstrusts, board members, directors, executives,trusts, board members, directors, executives,corporations not actively managing money, governmentcorporations not actively managing money, governmentownership, and venture capital companies.ownership, and venture capital companies.


25/30

Price earnings ratioPrice earnings ratio

A stock's price divided by earnings perA stock's price divided by earnings pershare. The ratio tells you how muchshare. The ratio tells you how muchinvestors are willing to pay for the right toinvestors are willing to pay for the right toa share of the company's futurea share of the company's futureearnings.earnings.


26/30

Market capitalizationMarket capitalization

The number of shares outstandingThe number of shares outstandingmultiplied by the stock price. Marketmultiplied by the stock price. Marketcapitalization is often used to compare thecapitalization is often used to compare thesize of companies.size of companies.


27/30

Common stockCommon stock

A security that represents ownership in aA security that represents ownership in acorporation. Holders of common stock exercisecorporation. Holders of common stock exercisecontrol by electing a board of directors andcontrol by electing a board of directors and

voting on corporate policy. Commonvoting on corporate policy. Commonstockholders are on the bottom of the prioritystockholders are on the bottom of the priorityladder for ownership structure. In the event ofladder for ownership structure. In the event ofliquidation, common shareholders have rights toliquidation, common shareholders have rights toa company's assets only after bondholders,a company's assets only after bondholders,

preferred shareholders and other debtholderspreferred shareholders and other debtholdershave been paid in full.have been paid in full.


28/30


29/30

Initial Public Offering (IPO)Initial Public Offering (IPO)

The first time an issuer sells stock to theThe first time an issuer sells stock to the

public and is listed on an official exchange.public and is listed on an official exchange.


30/30

Short sellingShort selling

Selling a borrowed security in anticipationSelling a borrowed security in anticipationof gaining by buying it back at a lowerof gaining by buying it back at a lowerprice before returning it to the lender.price before returning it to the lender.

temple third lesson winter 2011

Documents