Case Name :      AutoZone, Inc.

Authors :           Kenneth Eades, Justin Brenner

Source :             Darden School of Business

Case ID :           UV6463

Discipline :        Finance

Case Length :    17 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

The case can be taught in an introductory corporate finance course or to more experienced students or executives to spur a discussion about share repurchases and corporate financial strategies in general. If used in an introductory course, the case is most effective if preceded by a traditional dividend class. It follows a portfolio manager of Johnson & Associates, Mark Johnson, who was reviewing his holdings, including his position in AutoZone in early 2012. A prominent shareholder, Edward Lampert, had begun liquidating his position in AutoZone, and Johnson was concerned that Lampert’s reduced position could lead the company to stop using share repurchases as a method of distributing cash flows to shareholders. The case lists a number of alternative uses for the cash flows and asks students to assume Johnson’s role as an analyst and assess the likely impact of those alternatives on AutoZone’s stock price. The case can be taught in an introductory corporate finance course or to more experienced students or executives to spur a discussion about share repurchases and corporate financial strategies in general. If used in an introductory course, the case is most effective if preceded by a traditional dividend class.