Discuss the activities undertaken by the caspar ltd

Reference no: EM132387100

Required

Discuss the activities undertaken by the Caspar Ltd and Spooky Ltd in relation to the determination of which entity controls Ghosts Ltd.

Case Study : Voting rights

Mickey Ltd is a production company that produces movies and television shows. It also owns cable television systems that broadcast its movies and television shows. Mickey Ltd transferred to Mouse Ltd its cable assets and the shares in its previously owned and recently acquired cable television systems, which broadcast Mickey Ltd's movies. Mouse Ltd assumed approximately $200 million in debt related to companies it acquired in the transaction. After the transfer date, Mouse Ltd acquired additional cable television systems, incurring approximately $2 billion of debt, none of which was guaranteed by Mickey Ltd.

Mouse Ltd was initially established as a wholly-owned subsidiary of Mickey Ltd. Several months after the transfer, Mouse Ltd issued ordinary shares in an initial public offering, raising nearly $1 billion in cash and reducing Mickey Ltd's interest in Mouse Ltd to 41%. The remaining 59% of Mouse Ltd's voting interest is widely held.

The managing director of Mouse Ltd was formerly the manager of broadcast operations for Mickey Ltd. Half the directors of Mouse Ltd are or were executive officers of Mickey Ltd. Mouse Ltd and its subsidiaries have entered individually into broadcast contracts with Mickey Ltd, pursuant to which Mouse Ltd and its cable system subsidiaries must purchase 90% of their television shows from Mickey Ltd at payment terms, and other terms and conditions of supply as determined from time to time by Mickey Ltd.

That agreement gives Mouse Ltd and its cable television system subsidiaries the exclusive right to broadcast Mickey Ltd's movies and television shows in specific geographic areas containing approximately 45% of the country's population. Mouse Ltd and its cable television subsidiaries determine the advertising rates charged to their broadcast advertisers.

Under its agreement with Mickey Ltd, Mouse Ltd has limited rights to engage in businesses other than the sale of Mickey Ltd's movies and television shows. In its most recent financial year, approximately 90% of Mouse Ltd's sales were Mickey Ltd movies and television shows. Mickey Ltd provides promotional and marketing services and consultation to the cable television systems that broadcast its movies and television shows. Mouse Ltd rents office space from Mickey Ltd in its headquarters facility through a renewable lease agreement, which will
expire in 5 years' time.

Required

Should Mickey Ltd consolidate Mouse Ltd? Why?

If Mickey Ltd had not established Mouse Ltd but had instead purchased 41% of Mouse Ltd's voting shares on the open market, does this change your answer to requirement A? Why?

Reference no: EM132387100

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Reviews

len2387100

10/15/2019 3:43:36 AM

The group case study project in this course is designed as a practical simulation of a real-world business problem. Instead of testing only your theoretical knowledge, it allows you to develop a practical, business-orientated solution to a problem over time through social interactions. You will have ample opportunity to develop many of the Graduate Attributes that you are expected to have by the completion of your degree. In particular, you will be required to exercise the following key skills: - Communication skills - in your written assignments, by giving a group presentation, and by discussing with your team members. - Teamwork and leadership skills - while working together in a group. - Critical thinking and problem solving skills - by developing a practical solution to the real-world business problem. - Professional skills - by building relationships and networks, by taking initiative, planning, organising and self-managing to achieve the individual and group outcomes by the due dates.

len2387100

10/15/2019 3:43:14 AM

Structure of Presentation: - Is broken into well-sized, logical components that are linked together. This shows the extent to which the group has prepared for the presentation together. Visual Aids: - Are effective. Presentation and Delivery: - All members of the team equally contribute to the presentation (in terms of the quality, not the length). - Speakers deliver a coherent, consistent and professional presentation. - Presenters appear confident, their voice level is good and they make eye contact with the audience. Contents: - The presentation professionally and logically articulates about which accounting standards an Australian company should refer to and why. - The presentation professionally and logically articulates about main issues in the case and provides effective solutions to the client.

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