BEN & JERRY`S HOMEMADE 4
Assetcontrol devices utilized by Ben & Jerry`s.
Assetcontrol devices utilized by Ben & Jerry`s
Benand Jerry`s Homemade is a leading distributor of super-premium icecreams, yoghurts, and sorbets, which was founded in the year 1978 inan old gas station in Burlington by Vermont Cohen and Greenfield.
Strictassets control was preserved for the following factors:
CorporateCharter Restriction –Gave the board greater power to perpetuate the mission of the firm.The amendment was to create a staggered board of directors dividingit into three classes. With one class of directors being elected eachyear for a three-year term. The stockholders increased the number ofvotes required to alter, amend, repeal or adopt any provisioninconsistency with those amendments to at least two-thirds ofshareholders. Corporates charter restriction significance to the Benand Jerry`s Company and is meant to ensure total control of theassets and the business at large.
Differentvoting rights– Ben and Jerry`s created three equity classes: Class A Common,Class B common and Class A preferred. Ben and Jerry`s Greenfield held47% of the voting power. The preferred stock was held exclusively bythe Ben and Jerry`s Foundation. Voting right is important to thecompany because it state how their members distribute towards theirright to vote (VanRensburg, 2013).Voting right is essential to the majority ownership in some case. Forinstance, if there no operating agreement or the agreement is absent,any voting solemn declarations all members must unanimously consentto the operations, financial investment or asset purchase decision.Voting right policy determines the direction and management of thecompany, which makes voting right the essential part of the Companythat should not be avoided at all. It is evident that the Companydeveloped a better solution by adopting corporate operating decisionsin the interest of the community welfare especially on mattersdealing with the disposal of the factory wastewater (Teng,2011).The Company’s milky water was beneficial to the Earl, a local pigfarmer who could feed pigs using the white wastewater.
VermontLegislature –It strengthened the ability of Ben and Jerry`s to remain anindependent Vermont-based Company in the global market, and focusedon carrying out the threefold corporate mission, which managementbelieved was in the best interest of the enterprise. Vermontlegislature serves well the interests of any company serves theinterest of the companies` employees` supplier`s creditors andcustomers. The Company’s social oriented with well-balancedobjectives set that aim at meeting customers’ preferences regardingthe product, economically and socially to ensure the quality life ofthe community.
Calculatingan expected rate return
Expectedrate of return is the average of a probability of possible returns.Therefore, the formula should be:return=RF RATE + Market return–RF Rate x beta
Forexample, let`s say that the current risk-free- rate is 50%, and theS&P 500 is expected to return 2% next year. Am interested indetermining the returns of the Ben and Jerry`s. First will determinethat the better value of beta is 0.9. However, the overall stockmarket has a beta of 1.0. Ben and jerry`s beta of 1.9 tells us thatit carries more risk than the overall market: this means that weshould expect a higher potential return than the 12% percent of theS&P 500.
Thecalculations are as follows
Required(or expected) return = 5% + (12%-5%) 1.9
Required(or expected) return = 173%
Teng,M. (2011). The effects of an environmental management system onintangible assets and corporate value: Evidence from Taiwan’smanufacturing firms. AsianBusiness & Management, 10(3),381-404.
VanRensburg, D., J. (2013). Strategic brand venturing: An intersectionalIdea.Management Decision, 51(1),200-219.