Finance Discussion: Fiduciary Responsibility

Assume that you are a member of the Hershey Trust board. To whom (or what) do you owe your fiduciary responsibility? How does the legacy of Milton S. Hershey affect your thinking as a member of the board? Discuss the unique challenges presented by the ownership structure of Hershey. Discuss the challenges of fiduciary responsibility, comment on stockholder vs. stakeholder representation.
Calculate the WACC for HFC using the data provided in the exhibits; assume a Market Risk Premium of 5.5%. Estimate the stand-alone value of HFC using the free-cash-flow projections provided in case Exhibit 10. Calculate the implied value of Hershey, comment on your results. Based on your valuation of HFC, do you believe the company was fairly valued by the market before the announcement of the sale?
Discus the non-price considerations of the offers. To what degree do these impact the acceptance/rejection decision. Which, if any, bid would you vote to accept for the purchase of Hershey Foods Corporation? Is your decision primarily based on the economics of the bids or the desire to honor the legacy of Milton S. Hershey?
Answer both questions:

If you reject both bids and decide not to sell HFC, what will you do to achieve the diversification objective?
If you decided to accept one of the bids, what (if anything) would you want to communicate to the constituents who opposed the sale?

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