The case can be downloaded in word format under the filename DuPont. You are encouraged, however, to use the links included in the separate reference page for this case to help you find the information to answer the questions at the end of the case.

Questions and Assignments:

1. Why did investors "reward" DuPont but "punish" Seagram?
2. Prepare journal entries to record the various events described above for both DuPont and Seagram, beginning with the 1981 acquisition of Conoco stock by Seagram.
3. Explain why Seagram only had to pay $615 million in taxes on the stock repurchase transactions and only $20 million for the repurchase of the warrants in 1996.
4. Why did DuPont issue the warrants to Seagram? What did DuPont do with the 156 million shares in 1995? In 1996? Why?
5. What was the value of the warrants? How do you think this value was determined? Did Seagram pay anything for them?
6. What has happened to the warrants? Why? Reconstruct any journal entries (Seagram and DuPont, beginning with Seagram's purchase of Conoco stock for $18 per share.
7. Determine the market value per share for DuPont stock in 1994; 1995; 1996; and the most recent date. Do the same for Seagram.
8. What happened in 1997, partially resulting in the current price for DuPont stock not being higher than it is? Hint: check the "news release" file for March 1997 in DuPont's web page.
9. Determine DuPont's earnings per share (EPS) in 1994, 1995, 1996, calculate what EPS would have been if the shares had not been repurchased.
10. Determine the effect of the repurchase on Seagram's net income and EPS in 1994; 1995; and 1996.
11. Evaluate Seagram's decision to sell the DuPont stock
12. Critically evaluate the article "Stocking Up on Loopholes" by Allan Sloan, Newsweek. May 15, 1995, p. 66. Do you agree or disagree with Sloan's comments? Why or why not?

1. Working in your assigned groups draft a report in which you address the questions above. Group 1: Questions 1-5, 11, 12. Group 2: Questions 6-11,12.
2.  Note: To answer the questions you will need to study the Seagram's and DuPont's forms 10k and 10Q and DuPont's annual report. Additional useful information can be found at the reference page for DuPont and Seagram. It contains a number of links and additional references. You may find the the news releases in the DuPont web page particularly useful. Good hunting!