term paper
Study Questions for Interco
Case: Interco (Valuation approaches)
1. Assess Interco's financial performance. What measures would you use?
2. Why is the company a target of a hostile takeover attempt?
3. Can you demonstrate that the valuation range of $68-$80 per common share follows from the assumptions in Exhibit 12? Which assumptions would you question?
4. Do you think the raider is justified in offering $70/share?
5. How would you advise the Interco board on the $70 offer?
Note:
Some of the line items in the balance sheet in Exhibit 6 do not sum up to the sub-totals. You should assume the individual line items are correct.
For purposes of discussion, please assume the following:
The discount rate or cost of capital is 13%.
The market risk-premium, E(Rm) - Rf is 5%.
The tax rate is 43%.
Study Questions for Interco
Case: Interco (Valuation approaches)
1. Assess Interco's financial performance. What measures would you use?
2. Why is the company a target of a hostile takeover attempt?
3. Can you demonstrate that the valuation range of $68-$80 per common share follows from the assumptions in Exhibit 12? Which assumptions would you question?
4. Do you think the raider is justified in offering $70/share?
5. How would you advise the Interco board on the $70 offer?
Note:
Some of the line items in the balance sheet in Exhibit 6 do not sum up to the sub-totals. You should assume the individual line items are correct.
For purposes of discussion, please assume the following:
The discount rate or cost of capital is 13%.
The market risk-premium, E(Rm) - Rf is 5%.
The tax rate is 43%.
Study Questions for Interco
Case: Interco (Valuation approaches)
1. Assess Interco's financial performance. What measures would you use?
2. Why is the company a target of a hostile takeover attempt?
3. Can you demonstrate that the valuation range of $68-$80 per common share
Case: Interco (Valuation approaches)
1. Assess Interco's financial performance. What measures would you use?
2. Why is the company a target of a hostile takeover attempt?
3. Can you demonstrate that the valuation range of $68-$80 per common share follows from the assumptions in Exhibit 12? Which assumptions would you question?
4. Do you think the raider is justified in offering $70/share?
5. How would you advise the Interco board on the $70 offer?
Note:
Some of the line items in the balance sheet in Exhibit 6 do not sum up to the sub-totals. You should assume the individual line items are correct.
For purposes of discussion, please assume the following:
The discount rate or cost of capital is 13%.
The market risk-premium, E(Rm) - Rf is 5%.
The tax rate is 43%.
Study Questions for Interco
Case: Interco (Valuation approaches)
1. Assess Interco's financial performance. What measures would you use?
2. Why is the company a target of a hostile takeover attempt?
3. Can you demonstrate that the valuation range of $68-$80 per common share follows from the assumptions in Exhibit 12? Which assumptions would you question?
4. Do you think the raider is justified in offering $70/share?
5. How would you advise the Interco board on the $70 offer?
Note:
Some of the line items in the balance sheet in Exhibit 6 do not sum up to the sub-totals. You should assume the individual line items are correct.
For purposes of discussion, please assume the following:
The discount rate or cost of capital is 13%.
The market risk-premium, E(Rm) - Rf is 5%.
The tax rate is 43%.
Study Questions for Interco
Case: Interco (Valuation approaches)
1. Assess Interco's financial performance. What measures would you use?
2. Why is the company a target of a hostile takeover attempt?
3. Can you demonstrate that the valuation range of $68-$80 per common share