Valuation

a) Terminal Value: Terminal value is an important step to valuation the start-up firms. VC Methodology valuation is based on estimation of Terminal Value in exit year and ignores the cash flows to get a NPV. Conversely, DCF required projected cash flows and multiples to determine the Terminal value and NPV. VC method is more focused on…

He had a good top-management team, but he didn’t think any one of them could step in and run the show alone. He found stability in the RSE International combination that was worth something to him. In the increasingly global market place with more costly development, FVC needed a deep-pocketed partner to expand and to bankroll more research. Flinder believed that the company would also benefit from gaining access to a large marketing and distribution network. As the company continued to grow, it…

ACQUISITION OF CONRAIL(B) ASSIGNMENT Mergers, Acquisitions and Corporate Restructuring Submitted To Professor Vishwanath SR Submitted By Amit Prasad Swathi Nivarthi 1. Why did Norfolk Southern make a hostile bid for Conrail? Ans: The most prominent reason for Norfolk to make a hostile bid was to continue its existence. Either of the companies on merging with conrail would become the single largest railroad provider with over 70% market share. Such a single large entity would prevent the…

2015 revenue guidance by 5%. It was their first miss of guidance since their IPO. Although its growth rate is to slow down from historical levels of triple digits and 4Q 2015 revenue would be around 45% yoy according to the guidance, the current valuation is very cheap even with conservative growth rate assumptions. My 12m target price is $16.50. Besides, the company could be a good mid to long term hold to get exposure to strong execution capabilities in China's fast growing online…

Executive Summary: The purpose of this case study is to analyze the decision to acquire PacifiCorp by MidAmerican Energy Holdings Company. Warren E. Buffett, the CEO of Berkshire Hathaway Inc., is renowned for his investment strategies and has the best investment record in history. Buffett's investment decisions have led to a compound annual increase in wealth in Berkshire Hathaway of 24% from 1965 to 2004. However, with a growth in size only the larger sized acquisition could help in…

Present Value of Reserves One of the issues regarding present value of reserves is to consider who performed the valuation. If the reserves were calculated internally, there are is a lower level of reliability since there is motivation to alter the valuation. If Chesapeake hired outside contractors that were independent, there would be more reliance to the present value of reserves and other estimates related to assets. There should be further tests to examine if the estimates of reserves are…

REVENUE AND GROWTH According to historical data, Michael Kors had a constant growth in revenue since 2013 at a rate around 30% to 50%. Michael Kors has opened numbers of new stores include traditional stores located in malls and some special store in tax-free area in the airports. Also, the advertising and promotion help Michael Kors to be more popular among younger generations and white-collar office workers. Without worrying about losing consumers, those loyal customers make it possible for…

The purpose of this memorandum is to summarize my analysis of Church and Dwight Co. and to provide my recommendation for the common stock of the company. This includes a current valuation range and 1 and 2 year expectations for recurring Earnings per Share and target stock price. I recommend a hold for Church and Dwight Co.’s stock due to the slow predicted growth of the company’s 1 and 2 year expectations for recurring Earnings per Share shown in the table below. 2012…

Values Based Pricing Utpal Dholakia writes a piece for the Harvard Business Review (HBR) about how to simply calculate the price of merchandise utilizing a Values Based Model. Utpal explains that many of his MBA students have the hardest time grasping the concept of Value Based Pricing, he proceed to break it down into 1 simple sentence. He uses a simple definition: “Value-based pricing is the method of setting a price by which a company calculates and tries to earn the differentiated worth of…

economic purpose of valuation is for members of the economy to develop an understanding of what an asset is worth. Property rights and documentation provide a record and a history for assets and transactions. This gives money prices more stability, which helps grow and sustain an…