Financial Analysis - Teletech Corporation

Teletech Corporation, 2005

Discussion Questions

Note: For this case, you are required to turn in a short (approximately 1 page if double-spaced or 1/2 page if single-spaced) write-up of the case. In this write-up, you should summarize the important facts and issues of the case. Do not copy passages from the case, but instead synthesize the material. You are NOT required to write-up a "solution" for this case. The following questions are intended to help you focus on the issues that will be discussed.

1. How does Teletech currently use the hurdle rate?

2. Consider how you would estimate segment WACCs for Teletech (see the worksheet in case Exhibit 1). As you do this, make careful note of points in judgment in the calculation.

3. Interpret Rick Phillip's graph (Figure 2 in the case). How does the choice of constant versus risk-adjusted hurdle rates affect the evaluation of Teletech's two segments? What are the implications for Teletech's resource-allocation strategy?

4. Do you agree that "all money is green?" What are the implications of this view? What are the arguments in favor? Opposed?

5. Is Helen Buono right that management would destroy value if all of the firm's assets were redeployed into only the telecommunications business segment? Why or why not?

6. Has Products and Systems destroyed value? What evidence or illustration can you give to support your opinion?

7. What should Teletech say in response to Victor Yossarian?

Teletech Corporation, 2005

Discussion Questions

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