ANÁLISIS DEL CASO 3 4.1. ¿Porqué Radio One desea adquirir las 12 estaciones de Clear Channel Commmunications que están rankeadas entre las 50 mejores además de las nueve estaciones en Charlotte‚ NC‚ Augusta‚ GA‚ e Indianápolis‚ ID? ¿Cuáles son los beneficios y riesgos? 3 4.2. ¿Qué precio deberá ofrecer Radio One basado en un análisis de flujo de caja descontado? 3 ¿Son razonables las proyecciones del flujo de caja? 3 4.3. ¿Qué precio debería ofrecer Radio One basado en un análisis de múltiplos
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the following cash flows if the discount rate is 14 percent? [pic] A. -$3‚140.43 B. -$929.90 C. $247.181 D. $1‚027.67 E. $1‚127.08 2. Timothy is considering an investment of $10‚000. This investment is supposedly going to provide him with cash inflows of $2‚500 in the first year and $6‚000 a year for the following 2 years. At a discount rate of zero percent this investment has a net present value (NPV) of _____‚ but at the relevant discount rate of 18 percent the project’s NPV
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B. Both cost the amount of $ 60‚000. The discount rate is 10%. The cash flows before depreciation and tax are as follows: Year Proposal A Proposal B $ $ 0 (60‚000) (60‚000) 1 18‚000 19‚000 2 15‚000 17‚000 3 18‚000 19‚000 4 16‚000 14‚000 5 19‚000 15‚000 6 14‚000 13‚000 Evaluate the above proposals according to: 1. Pay Back Period. 2. Accounting Rate of Return (ARR) 3. Net present value method
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Part 1: In 2000‚ Radio One‚ Inc. sees strategic opportunity in the opportunity to grow through acquisition‚ following a Clear Channel divestiture mandated by the FCC. The divestiture poses the opportunity to Radio One to acquire twelve (12) urban stations that are in the top 50 African American markets in the U.S. Even though the company saw tremendous growth through acquisition over the prior decade‚ this unique situation has the potential to generate significant shareholder value and further
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summary of no more than 2 pages. Guideline Questions for you Report 1. What is the value of the project assuming the firm was entirely equity financed? What are the annual projected free cash flows? What discount rate is appropriate? NPV = $1‚228‚485 Discount rate = cost of equity (from CAPM) = 15.8% (see model for projected free cash flows) 2. Value the project using the Adjusted Present Value (APV) approach assuming the firm raises $750 thousand of
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1 - Energy Costs Find information on energy cost: Advantages (government websites) 2 - Cost of Equity‚ Appropriate Discount Rate (WACC) Cost of equity 1. Formula Risk Free Rate + (Market Premium x Overall Company Beta) 2. Each part a. Risk free rate (10-year T-bill) i. bond rating chosen * interest rate * b. Market premium c. Beta i. Appropriate Discount Rate (WACC) 1. Formula Weight of Debt x After-Tax Cost of Debt) + (Debt to Equity x Cost of Equity) 2. WACC (important – why is it important
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Why does Radio One want to acquire the 12 urban stations from Clear Channel Communications in the top 50 markets along with the nine stations in Charlotte‚ NC‚ Augusta‚ GA‚ and Indianapolis‚ IN? What are the benefits and risks? After the Telecommunication act in 1996 significant consolidation occurred in the Radio Industry‚ thereafter Radio companies were able to obtain cost savings by acquiring multiple stations in one area and reaching economies of scale. The nation’s two biggest radio company
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Discount Cruises - Save Your Cash - Book Brilliant! Going for a cruise vacation is an extraordinary choice as you can anticipate a stunning time. Not at all like customary vacations‚ has a cruise trip guaranteed a totally unprecedented affair that you are sure to savor for whatever remains of your life. The uplifting news is that few cruise lines are putting forth discount that offer an entire scope of intriguing exercises and administrations on board a noteworthy boat. It is helpful and simple
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Case Study: Radio One‚ Inc. - Part A Corporate Valuation Date: 21-09-2009 Instructor: Dr. Oliver Spalt Course: 323058 Corporate Valuation Faculty Economics and Business Administration‚ Tilburg University P.W. Segers J.J.T.M. Zegers 779710 722085 1. Radio One’s opportunities and risks with respect to their acquisition policy We have identified four main benefits and five major risks with respect to the desired acquisition of 12 urban stations along with the nine stations in Charlotte
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Cash Discount on Sales Cash discount is the discount offered by seller for paying cash early. Cash discount is only offered on credit sales where the customers do not pay at the time of sale but promise to pay latter. There are two methods of accounting for sales that offer cash discounts; the gross method and the net method. These two methods are explained with the help of the following example: Example Suppose Company A sells certain goods at a price of $4‚400 with terms of payment
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