Minera Las Piedras (MLP) is a copper mining company from Chile that is privately owned. Its leadership had a bizarre issue in January 2005: the business had too much cash. The company earned $500 million more than anticipated in 2004, and as a result was now exploring its option uses for the funds. Although all agreed it was an issue that was nice, it still presented direction with a rather complex set of alternatives of how and where to invest or disperse these newfound riches. This case was designed to serve as a platform for teaching how large corporations must deploy their operating and free cash flows on an annual basis.
It highlights the continuing obligations, which a company must fulfill when it comes to returns and annual investments to its investors. Once these mandatory cash flow obligations are fulfilled, the business is then free to determine how it wants to deploy its discretionary cash flows between changes in capital structure, discretionary investments, and shareholders. The case may also be used to link areas of conventional monetary theory—cost of capital, capital budgeting, cash flow analysis, monetary structure—within the general corporate strategy of the business.
Publication Date: 11/15/2011
This is just an excerpt. This case is about Finance
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