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This case investigates the alternatives that Signet Banking Corporation faced in 1995 as it attempted to restructure itself; the market perceived Signet to be undervalued, especially in light of the strong performance of its credit card division. Students must choose among several competing proposals to enhance shareholder value.
To practice strategic analysis, compare financial and industrial firms, exercise valuation skills, and review effectiveness of alternative measures to increase shareholder value. The financial aspects of the case involve a discussion of repurchases, the distinctions between targeted stock versus ordinary stock, and the valuation of financial firms by price earnings (PE) ratios and discounted cash flow (DCF) methods.