public offering? (You can use simple discounted cash flow model or variety of comparable public firms trading multiples in assessing the value of the company) 1. What is your estimate of the value of Eskimo Pie Corp as a stand alone company? Luckily, I checked my e-mail this afternoon, so using a WACC of 16%, an FCF of $4,004,000, and $13,000,000 cash reserve (pg 593) I came up with this table in excel. growth rate (g) value total after adding cash $13 mil 0.06 42,442,400.00 55
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modifying them? Justify. They are appropriate to some extend. However, assumptions that they made may not be come true. Especially, the one that winding down the women’s casual footwear within one year. 3.Estimate the value of Mercury using a discounted cash flow approach and Liedtke’s base case projections. Be prepared to defend additional assumptions you make. Rd=6% T=40% Wd=20% We=80% WACC= wdxrd(1-T) + wsrs rs=rRF + (rM- rf)xb Assumptions: b= industry average= 1.5578 rM= industry average=9
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we examined ways in which we can adjust the value of a risky asset for its risk. Notwithstanding their popularity, all of the approaches share a common theme. The riskiness of an asset is encapsulated in one number – a higher discount rate, lower cash flows or a discount to the value – and the computation almost always requires us to make assumptions (often unrealistic) about the nature of risk. In this chapter, we consider a different and potentially more informative way of assessing and presenting
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Case 3: Diamond Chemicals Diamond Chemicals operates two large polypropylene production plants, the Merseyside Works in England, and the other in Rotterdam, Holland. Diamond Chemicals’ plant manager Lucy Morris is currently examining a (British Pounds) 9 Million project to improve the plant, which has been under scrutiny for poor financial performance. Morris has assumed the responsibility of Merseyside Works, and has decided improvements need to be made. Although there is room for substantial
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Symbol/Exchange Beta Shares Outstanding Average daily volume (3 month average) Current market cap Current Price Dividend Dividend Yield Valuation (per share) DCF Analysis Comparables Analysis Target Price Current Price Summary Financials Revenue Operating Cash Flow Net Income 662M 2009A 44.6M 2009A 4.6M 2009A 9.41 – 17.44 CPKI / NYSE 1.25 24,183,000 400,876 365,975,000 $15.07 $0.00 0% $15.18 $17.73 $16.46 $15.07 BUSINESS OVERVIEW California Pizza Kitchen was founded in 1985 by Rick Rosenfield and Larry
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Company to make the best possible decision, they must address the following issues: Determine an accurate representation of the risk of the two-stage project with the appropriate cost of capital, determine New England Seafood Company’s future net cash flows, and determine the efficient utilization of land across company processing divisions. We have determined that an appropriate cost of capital is 10%. This 10% is the weighted average cost of capital for New England Seafood Company and we find
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rest of the analysis will examine alternative NPV valuations and provide a recommendation to Mr. Harris as to whether or not Harris Seafood should make the investment in the shrimp processing plant. | FCR projection with 0% inflation | Free Cash Flow ($000) | 1980 | 1981 | 1982 | 1983 | 1984 | 1985 | 1986 | Revenues | $- | $26,125 | $57,119 | $67,759 | $68,875 | $70,063 | $71,250 | Cost Of Goods Sold | $- | $22,828 | $46,837 | $55,562 | $56,478 | $57,451 | $58,425 | Selling, General and
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1 The Value of Synergy Aswath Damodaran Stern School of Business October 2005 2 The Value of Synergy Many acquisitions and some large strategic investments are often justified with the argument that they will create synergy. In this paper, we consider the various sources of synergy and categorize them into operating and financial synergies. We then examine how best to value synergy in any investment and how sensitive this value is to different assumptions. We also look at how this synergy
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FBE-529 FINANCIAL ANALYSIS AND VALUATION Final Valuation Project Apple Inc. (AAPL) Jeffrey Bullock Zefu Chen Xiangyu Shi Xuezhou Xiao 4/24/2012 Company Analysis Apple Inc. designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players, and sells a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications. The Company’s products and services include the iPhone
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STANDARD EDITION Ross Westerfield Jordan FUNDAMENTALS OF CORPORATE FINANCE tenth edition StuDEntS... Want to get better grades? (Who doesn’t?) Prefer to do your homework online? (After all, you are online anyway…) Need a better way to study before the big test? (A little peace of mind is a good thing…) With McGraw-Hill's Connect Plus Finance, ® StudentS get: • Easy online access to homework, tests, and quizzes assigned by your instructor. • Immediate feedback on how you’re doing
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