Posted: May 21st, 2023

What adjustments, if any, should OTPP

What adjustments, if any, should OTPP make to its base valuation model

Each person should hand in a one-page summary of their analysis of the case. What you turn in should summarize your conclusions and convince me that you have done some analysis, but in just one page maximum. Your analysis should touch on the following questions:

1. Should OTPP even be investing in oil sands if they want to be a responsible investor?

2. What is the fiduciary duty of the pension fund?

3. The following two questions are things that I want you to think about generally, and specifically as you evaluate the two possible investments in this case: i) What are the potential barriers to implementing the PRI? ii) How can ESG information be incorporated into financial analysis?

4. Evaluation of Enbridge as an investment of OTPP: Assume that absent any ESG concerns, investment in Enbridge is favorable.

a) What would be the financial impact if Enbridge had to pay for the entire Kalamazoo cleanup?

b) What is the impact of a delayed or denied project to Enbridge?

c) Assume Enbridge can invest $1 billion in additional safety measures for its Northern Gateway project.

Cheng believes this will increase the likelihood of regulatory approval by 70%. How much should Cheng add to his valuation? d) What adjustments, if any, should OTPP make to its base valuation model of Enbridge? Think about recurring spills and the value of the Northern Gateway project.

One-Page Summary:

OTPP should reconsider investing in oil sands if it aims to be a responsible investor. Oil sands extraction is associated with significant environmental concerns, including high greenhouse gas emissions and the destruction of ecosystems. As responsible investors, OTPP should prioritize sustainable and low-carbon investments to align with environmental objectives.

The fiduciary duty of the pension fund is to act in the best interests of its beneficiaries. This includes managing investments prudently, maximizing returns within acceptable risk levels, and considering long-term sustainability. OTPP must balance financial returns with responsible investment practices, taking into account environmental, social, and governance (ESG) factors.

i) Potential barriers to implementing the Principles for Responsible Investment (PRI) include limited data availability, difficulty in quantifying ESG factors’ financial impacts, and conflicting priorities between financial returns and sustainability goals. ii) ESG information can be incorporated into financial analysis by integrating it into risk assessment, valuation models, and decision-making frameworks. Factors such as carbon footprint, social impact, and governance practices should be evaluated alongside traditional financial metrics.

a) The financial impact of Enbridge paying for the entire Kalamazoo cleanup would depend on the costs involved. OTPP should assess the potential expenses and factor them into its valuation model for Enbridge to account for the financial liability.

b) A delayed or denied project would have a negative impact on Enbridge. OTPP should evaluate the potential consequences, such as lost revenues, reputational damage, and increased regulatory scrutiny, and adjust its valuation model accordingly.

c) If Enbridge invests $1 billion in additional safety measures for the Northern Gateway project, Cheng believes it would increase the likelihood of regulatory approval by 70%. OTPP should consider this information and adjust its valuation model to reflect the higher probability of successful project completion and factor in the potential benefits.

d) OTPP should make adjustments to its base valuation model of Enbridge to incorporate the recurring spills and the value of the Northern Gateway project. It should quantify the costs and reputation damage associated with spills, and assess the potential future earnings and risks associated with the Northern Gateway project. Adjustments should be made to account for these factors and provide a more comprehensive valuation of Enbridge.

Tags: , , , , , , , , , , , , ,

Order for this Paper or Similar Assignment Writing Help

Fill a form in 3 easy steps - less than 5 mins.

Why choose us

You Want Best Quality and That’s our Focus

Top Essay Writers

We carefully choose the most exceptional writers to become part of our team, each with specialized knowledge in particular subject areas and a background in academic writing.

Affordable Prices

Our priority is to provide you with the most talented writers at an affordable cost. We are proud to offer the lowest possible pricing without compromising the quality of our services. Our costs are fair and competitive in comparison to other writing services in the industry.

100% Plagiarism-Free

The service guarantees that all our products are 100% original and plagiarism-free. To ensure this, we thoroughly scan every final draft using advanced plagiarism detection software before releasing it to be delivered to our valued customers. You can trust us to provide you with authentic and high-quality content.

How it works

When you decide to place an order with Nursing Assignment Answers, here is what happens:

Complete the Order Form

You will complete our order form, filling in all of the fields and giving us as much detail as possible.

Assignment of Writer

We analyze your order and match it with a writer who has the unique qualifications to complete it, and he begins from scratch.

Order in Production and Delivered

You and your writer communicate directly during the process, and, once you receive the final draft, you either approve it or ask for revisions.

Giving us Feedback (and other options)

We want to know how your experience went. You can read other clients’ testimonials too. And among many options, you can choose a favorite writer.