disbursement of the debt. Once the debt is brought down to industry sustainable levels‚ we can estimate the terminal value using the WACC valuation‚ to estimate the Present Enterprise Value that may be suitable for the proposed acquisition. 1.2. Cash flows valued for 2008 through 2012 The present value of the UFCF is 1 255‚3. Here after the details of how we come to this result. We need to determine the discount rate using the comparable company’s averages. Equity Net Debt/ Debt/ Equity Asset
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share = Book value of equity / # of shares i. Current stock price: $51.07 (Yahoo Finance Stock Price as of date 9/21/12) j. Number of shares outstanding (p. 44 Balance Sheet) k. No preferred stock (given) l. Cash‚ short-term investments‚ & non-operating assets = (Cash & cash equivalents) + (Short-term
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option to expand capacity (current full capacity will be reached in 2014) for $60 million and generate additional sales of 20% base sales in 2014‚ 30% in 2015‚ and 40% thereafter. The two companies tentatively agreed on a cash offer of $265 million. However‚ a discounted cash flow (DCF) analysis of the base acquisition and option will be performed along with a strategic and sensitivity analysis to help Sterling determine the value of the acquisition‚ the expansion option‚ and in combination. Sterling
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consideration to acquire Torrington from Ingersoll-Rand. This reports provides the needed information on Torrington’s worth‚ price at which Torrington could be acquired and the acquisition strategies to negotiate its deal. The evaluation uses the discounted cash flow analysis using WACC to calculate the value of Torrington worth with synergies. The value turned out to be more than the estimated minimum value of the target. The final recommendation is to proceed with the acquisition as planed which would be beneficial
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multi-currency cash flows‚ currency risk and political risk being taken into account in our valuation model? 4. What is the relevant cost of capital for Jersey? For R.T. Nakit? Can they be different? Why? 5. What is the Dinar (Pound) value of the joint venture R.T. Nakit (jersey)? What are the project’s value drivers? 1- The data presented on exhibit 3.7 is‚ indeed following some of the assumptions stated on exhibit 3.1: minimum cash level is 10% of total assets‚ which was proved by dividing cash by total
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Tasty Foods Case Summary (Roxana): Tasty Foods Corporation was founded in 1995 by Henry Abercrombie. The corporation is a food conglomerate that has major product lines including cereals‚ frozen dinners‚ canned sodas and fruit juices. Abercrombie founded the company with a small inheritance and with the idea of producing instant hot cereal. The firm’s hot cereal proved to be a success and was well accepted by the consumers. Over the years it grew by its acquisitions and product innovation ideas
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12/10/12 BMGT 443 McDonalds Valuation Project Write Up To begin the economic analysis of McDonalds‚ we must first look at the company beta. McDonalds has a beta of .34 meaning it is not as volatile when compared to the market and can be categorized as a low risk stock. To determine that financial impact of changes in economic conditions to the performance McDonalds‚ three economic indicators must be evaluated. The leading economic index (LEI)‚ coincident economic index (CEI)‚ and lagging
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simply took the average yield-to-maturity for Southwest’s outstanding bonds (see Exhibit 6). Cost of debt was 6.91% Cost of Equity In order to calculate the cost of equity in this particular situation the CAPM model was the best choice. The risk-free rate and the market risk premium were given in the case. Both numbers were five percent. Beta can be somewhat difficult to calculate‚ especially for a firm that is not publicly held. For estimating this value we can once again use the multiples
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Increasing Gross Profit Margin (Preferably ≥ 40%) ROI Increasing high ROE (Preferably ≥ 15%) Increasing ROIC (Preferably ≥ 15%) Increasing CROIC (Preferably ≥ 15%) Liquidity Increasing Net Cash from Operations Increasing Free Cash Flow / Sales (Preferably ≥ 5%) Increasing Quick Ratio (Preferably ≥ 1) Short & declining Cash Conversion Cycle Efficiency Increasing Net Profit Margin (Preferably ≥ 10%) Increasing OCF/TA (Preferably ≥ 8%) 12‚053 928 29.9% 13‚718 945 30.4% 14‚904 1‚015 26.6% 18‚646
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their PSC closures as discontinued operations. The criteria used‚ assessment period‚ presentation‚ and disclosure for this retail company will be explained in detail when applying proper GAAP. A component of an entity comprises operations and cash flows that can be clearly distinguished‚ operationally and for financial reporting purposes‚ from the rest of the entity; it may be a reportable segment or an operating segment‚ a reporting unit‚ a subsidiary‚ or an asset group in which Auto World determined
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