1 – Methodological Approach In this case‚ American CC – the intended acquirer of AirThread Connections- will use leveraged buyout (LBO) model‚ which means the company will finance the acquisition through bank loan or some other borrowing methods. Hence‚ the debt-to-equity ratio will change in time. Since we will need to estimate the discount rate any time the capital structure changes‚ neither WACC nor APV would be reliable alone. Therefore‚ Ms. Zhang should use the combination of WACC and APV
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Wathen as to whether he should buy Pinkerton for the asking price of $100 million. Second‚ regardless of your answer to #1‚ assuming that Wathen does buy Pinkerton‚ should he finance the purchase with Financing Alternative #1 (debt and equity financing from an investment firm) or Alternative #2 (all debt financing from a bank). The financing alternatives are discussed on page 4 of the case. You should do the discounted cash flow valuation of the deal using Adjusted Present Value. The question is
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21 No. 1 – Acquisition Analysis Brau Auto‚ a national autoparts chain‚ is considering purchasing a smaller chain‚ South Georgia Parts (SGP). Brau’s analysts project that the merger will result in the following incremental free cash flows‚ tax shields‚ and horizon values: Years 1 2 3 4 Free cash flow $1 $3 $3 $7 Unlevered horizon value 75 Tax shield 1 1 2 3 Horizon value of tax shield 32 Assume that all cash flows occur at the end of the year. SGP is currently
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1. A company needs to elect 10 directors. A shareholder owns 80 shares. What is the maximum number of votes that he or she can cast for a favorite candidate under (10 points) a. Straight voting? 80 b. Cumulative voting? 80*10 = 800 2. “If the efficient-market hypothesis is true‚ the pension fund manager might as well select a portfolio by throwing darts at the Wall Street Journal.” Explain why this is not so. (10 points) This strategy does not consider risk. 3. The NuPress Valet Company
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become in the next 10 years? How will US higher education help you achieve your ambition (limit in 350 words) When I was a little kid‚ people usually asked me :”Who do you want to be in the future?” I replied them :”I want to be a scientist ”. Many years later‚ I grow up and gradually understand that no one can predict his own future and no one can tell exactly what will he be doing next 10 years since life is a long journey which full of unexpected twists and turns. In 10 years‚ there’s a possibility
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only five hundred to one thousand years old depending on how far back you choose to look at Native American history. As we look at France history as far back as the cave paintings‚ but real first recorded history of France is seen as 600 BCE when the Greek controlled a part of modern France. France is a country of rich history and culture. The Authors of Sixty Million Frenchmen Can’t Be Wrong used the words native and aboriginals to describe the citizens of France. I agree with the authors opinion
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GROUP ACTIVITY: UTILIZING THE FINANCIAL MARKET As a financial manager of a large firm‚ you plan to borrow $70 million over the next year. 1) What are the most likely ways in which you can borrow $70 million? The best way the company must do in order to borrow $70 million over the next year is by issuing bonds to financial institutions such as mutual funds and insurance companies. As to attract investors‚ issuing bonds is seems to be less risky than shares and they may be willing to purchase them
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I can honestly say that if I won 50 million dollars in the lottery I would enjoy my winnings with my family by doing anything and everything they desire. Although I have given to charity in the past it would not be on the top of my list for things to do. I’m pretty certain that everyone wants that life of luxury and while many of us are already living quite well it just may not be well enough. So if you say you don’t want a life where you can have anything you want in this
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Sunrise" When the sun sets‚ thousands of hues of purple‚ orange‚ pink‚ and yellow fill the heavens. They blend with the clouds and cast off a dreamy air. It is a time when the colors of the day meet the colors of the night. Deep purples of the coming nightfall mix ever so gently with the orange tingles of the day. This passing from day to night forms a period of pure magic‚ when one may no longer distinguish between where the day ends and the night sky begins. The image created is so gentle to
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American culture had a slow steady start‚ and for a while it seemed as though it would remain that way. This was until an island on the coast of New York changed American culture and society. This island was called Coney Island. What was Coney Island and what did it bring to the Americans? It was an island that fulfilled the changing wants of American’s. This island influenced American’s wants from labor‚ and high society to leisure. Though the island didn’t remain on its all-time-high forever
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