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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.


Date: 10/08/2009

Keys: Evaluating project economics and capital rationing (p396), Stock market (p281)


Questions for discussion:

  • What are the advantages and disadvantages to following this strategy?
  •  How will this affect the firm’s stock value in the near and long term? Explain your answer.

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