Description: ConocoPhillips, the third-largest U.S. oil company, said it will sell about $10 billion of assets in the next two years and cut capital spending in 2010 to reduce debt and increase returns on capital.
Keys: Evaluating project economics and capital rationing (p396), Stock market (p281)
Questions for discussion:
- What are the advantages and disadvantages to following this strategy?
- Â How will this affect the firmâ€™s stock value in the near and long term? Explain your answer.