This case is a classic example to demonstrate the innovation that is taking place in contemporary corporate finance. It deals with dual subject categories of capital structure and dividend policy. The case may also be used in International Finance classes as the corporate culture encompasses the emerging markets.
Hindustan Lever Limited (HLL) is India's largest Packaged Mass Consumption Goods (PMCG) Company. With an excellent marketing strategy and cutting-edge distribution network, HLL has made enviable penetration in the widely scattered rural markets of India. It is a leader in Home and Personal Care Products, and Foods and Beverages.
The objective of this case is to make students realize the implications of various methods of shareholder rewarding available to a corporation. The corporation has to weigh the consequences of each alternative in the context of expected sustainability of future earnings and their growth. The case discussion may center on corporate finance issues, agency issues, and ownership issues. EVA analysis adds rigor to the student understanding of income and cost of capital estimation.
Author: Yatin Bhagwat
Institution: Grand Valley State University
Industry: Consumer Products, Multinational Corporation
Discipline: Finance, Accounting and Control
Language: English
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