Module 2 Critical Thinking 4. Evaluate the strengths and weaknesses of the Cash Payback Period‚ Discounted Cash Payback Period‚ NPV‚ IRR and MIRR capital expenditure budgeting methods. Prepare a recommendation for Stewart regarding the capital budgeting method or methods to use in evaluating the expansion alternatives. Support your answer. Capital budgeting techniques such as payback period‚ net present value (NPV)‚ internal rate of return (IRR) and modified internal rate of return (MIRR) all offer
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end of 2012‚ American Greetings was at the bottom of its peer group‚ with a low EV-EBITDA multiple‚ market-to-book below 1‚ a 6x PE ratio‚ and a share price of $12.51 that had dropped significantly in the months prior. American Greetings has historically used a share repurchase strategy in times of low equity. This is a good defense if the stock price is down temporarily‚ but the low valuation could also be a sign of larger trouble where it would be wise to preserve cash. Both S&P and Value Line
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Statement of the Problem If the firm remains a partnership could the firm continue to compete on an equal footing with its competitors‚ would they be able to retain key employees? How would tangible as well as intangible assets be valued in its stock price as a public firm? Problem: What initial public offering valuation would be most appropriate for Goldman Sachs & Co. to use? II. Alternative Solutions 1. Industry Comparables 2. DCF model III. Analysis of Alternatives In order to compare
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acquisition. If Apache defers the exploiting of the reserves‚ there exists a possibility for the future cash flows becoming even more valuable. For example‚ Apache could have more precise information about the value of the cash flows from reserves. In addition‚ Apache might have more accurate information about the amount of oil that the reserves contain or about the development of oil prices in the future. This opportunity to obtain more accurate information must value something. In addition‚ instead
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EXECUTIVE SUMMARY This report will analyze the price Monmouth should pay to acquire RTC by using DCF‚ market multiple‚ and stock exchange approaches. Rationales on why RTC is a good acquisition by Monmouth RTC is a good acquisition by Monmouth as it falls under their three established criteria for all acquisitions‚ and also because the future potential profits‚ growth opportunities and synergies from this acquisition is likely to be greater than the cost of this merger. Sources of synergy gains
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Discounted Cash Flow Valuation of Aggregate Reserves Discounted Cash Flow Valuation – Proved Developed Reserves Discounted Cash Flow Valuation – Proved Undeveloped Reserves Discounted Cash Flow Valuation – Probable Reserves Discounted Cash Flow Valuation – Possible Reserves Question 3 To value MW Petroleum we would consider the assets in place and the option bearing assets discretely. The assets in place consist of the proved developed reserves since they are already producing a
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| Advanced Corporate Finance Presented by 9/3/14 Professor Nikolay Halov 1 Plan for today • Syllabus • Introduction to the course • Is Corporate Finance Irrelevant? 2 General Information • • • • Professor Nikolay Halov Office: KMC 9-151 E-mail: nhalov@stern.nyu.edu Phone: 212-998-0836 3 Course Information Meeting times: Monday Wednesday 2-3:15pm‚ 3:30-4:45pm •The web page: – NYU Classes – Class materials‚ problems‚ solutions‚ communication •TAs: • Ryan Liu: ryan.liu@stern.nyu.edu
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million in RMAG. The proceeds of the sale would be used to finance the growth of RMAG. Big Sur’s saw a highly promising‚ but a highly risky investment opportunity. Kim McGraw‚ a managing director with Big Sur was put in the position to negotiate a price and terms of the investment. She based her negotiations on the assessment of RAMG’s economic value. Big Sur Capital Management is located in San Francisco‚ California and has been organized as a hedge fund since 1968. Over the years it proved more
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takes the form of a discounted cash flow valuation. Relative valuation‚ estimates the value of an asset by looking at the pricing of ’comparable’ assets relative to a common variable like earnings‚ cashflows‚ book value or sales. Contingent claim valuation‚ uses option pricing models to measure the value of assets that share option characteristics. Aswath Damodaran! 2! I. Discounted Cash Flow Valuation! What is it: In discounted cash flow valuation‚ the value
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Valuation of Mergers and Acquisitions SUBMITTED BY: DEBAYAN MUKHERJI PGDM ’"2008-2010 ROLL NO: 08PGDM083 INTERNATIONAL MANAGEMENT INSTITUTE‚ NEW DELHI CONTACT NUMBER: 09717443910 EMAIL : debayan.p08@imi.edu Valuation of Mergers and Acquisitions Mergers and acquisitions (more generally‚ takeovers) are an important means through which companies achieve economies of scale‚ face the competition‚ or respond to economic shocks. For example ‚how the $54 billion US chemical major
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