current free cash flow of $400‚000 is expected to grow at a constant rate of 5%. The weighted average cost of capital is WACC = 12%. Calculate EMC’s value of operations. (13-3) Horizon Value Current and projected free cash flows for Radell Global Operations are shown below. Growth is expected to be constant after 2012‚ and the weighted average cost of capital is 11%. What is the horizon (continuing) value at 2012? | Actual | Projected | | 2010 | 2011 | 2012 | 2013 | | Free cash
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Lululemon Athletica Case Study I. Executive Summary Statement of problem and recommend action Lululemon is a rapidly growing company with a different niche for its products. Its philosophy as well as their business model has allowed them to increase revenue over the past years. The dilemma they faced is how to continue expanding without losing their special niche‚ grassroots and a nontraditional feel of the brand that sets them apart from their competitors. In order to do so‚ it has been
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I. Executive Summary In May of 2000‚ Yeats Valves chairman and CEO‚ Bill Yeats‚ met with his consultant and fellow board member‚ Kate Porter‚ to discuss the final negotiations regarding the acquisition of Yeats Valves by TSE International Corporation. Although the social terms of the merger had been discussed‚ no specific details had been settled. Organized in 1980 for engineering and developmental work on specialty valves and heat exchangers‚ Yeats Valves and Controls Inc (YVC) had a reputation
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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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MEMORANDUM DATE: TO: FROM: SUBJECT: Aquarius – Pub Valuation Overview The Greens are looking to sell Aquarius Ales‚ their pub located in Austin Texas as they are looking to fully retire and take up golfing and quilt making. Recently they have received their first offer to buy the business which was $450‚000 from Marc Johnston and John Sheridan‚ two University of Texas graduates who miss the college scene. The Greens are seriously considering the offer but feel that it
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equity Market value of debt Market value of equity Pretax cost of debt After Tax cost of debt rd Market value weights of: Wd Debt We Equity bL Levered beta Rf Risk-free Rate Market Premium RM Ke Cost of equity WACC EBIT - Taxes (34%) EBIAT + Depreciation - Capital expense Change in Net Working Capital Free Cash Flow Value of Assets ( FCF/WACC) CASE # 31 0% Debt 100% Equity $ $ 20‚000 $ $ 20‚000 7.0% 4.62% $ 34% $ $ $ $ $ $ 0 1 0.8 7% 8.6% 13.88%
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| Radio One‚ Inc. | Memo To: Mr. Alfred Liggins III From: Team 5 Date: [ November 22‚ 2011 ] Re: Clear Channel Communications Inc. acquisitions Mr. Liggins The recent merger between Clear Channel Communications Inc. and AMFM has presented a rare opportunity for Radio One‚ Inc. The proposed divestiture of Clear Channel will be the largest in the history of the industry. Radio One‚ Inc. can acquire 12 established urban stations in the top 50 markets‚ which rarely become available. Market
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THE GEORGE WASHINGTON UNIVERSITY CROCS‚ INC. Case Study Report ¹ SUBMITTED TO PROF. NEIL COHEN School of Business and Public Management The George Washington University BY Anil Kumar Cheerla FINA 6224 FINANCIAL MANAGEMENT WASHINGTON‚ DC January 26‚ 2011 Q1: Consider which comparable peers are good matches and use them to perform a multiples analysis‚ calculating and defending an estimate of Crocs value. Soln: Comparable companies analysis – Done to determine appropriate valuation
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False b. True. 10. PVGO = 0‚ and EPS1 equals the average future earnings the firm could generate under no-growth policy. 11. Free cash flow is the amount of cash thrown off by a business after all investments necessary for growth. In our simple examples‚ free cash flow equals operating cash flow minus capital expenditure. Free cash flow can be negative if investments are large. 12. The value at the end of a forecast period. Horizon value can be estimated using
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Internal factorsExternal factors | Strengths: 1. Quality recognition. 2. Leadership positions for flour milling and film exhibition divisions. 3. Strong free cash flow from flour milling operations. 4. Shrewd management with proven track record. 5. Strong financial position. 6. Online system. 7. Cost advantage. 8. Employer relations. 9. Brand recognition. | Weaknesses: 1. Earnings are subject to prices wheat. 2. Less margin profit of flour. 3. Process-oriented R&D.
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