Introduction Our case study titled‚ The AT&T and McCaw merger negotiation‚ provides us with an opportunity to negotiate the terms of the merger between McCaw cellular and AT&T. McCaw was the largest competitor in the rapidly growing cellular telephone communications industry. AT&T was the dominant competitor in long-distance telephone communications in the United States‚ and one of the largest corporations. Prior to the negotiations‚ it had no position in cellular communications. Brief Insight:
Premium Stock Free cash flow Stock market
Instructor: Dr. Emmanuel Anoruo Instructions: 1. Answer only 15 questions 2. Show all work 1) Given the financial data for New Electronic World‚ Inc. (NEW)‚ compute the following measures of cash flows for the NEW for the year ended December 31‚ 2005 (a) Operating Cash Flow. (b) Free Cash Flow. For the year ended December 31‚ EBIT + DEPR – TAXES 30000+3000-8000= 25000 OCF=25000 OCF-INV-FIXED ASSETS 25000-3000-2000=20‚000 2) Meese Paper Distributors‚ Inc. has before-tax
Premium Time value of money Cash flow Rate of return
relationship with the employee and customer. On the other hand‚ as we can see in exhibit 1 during this time cash balance has decreased from $120.1 in 2002 to $9.4 in 2005‚ it’s a decline of 92% over the four year due an increased in total asset by 14.4% and inventory by 8.7% in the last four year from 2002 to 2005. If nothing is done to solve cash problem and continue to burn a lot of cash‚ debt requirement will become larger and larger and will become a major hazard to the business. Horniman is
Premium Cash flow Cash conversion cycle Working capital
comparing with the information required by other valuation methods. We believe that the good quality of data can guarantee the reliability of our valuation. Our valuation process includes the following six steps. 1. Decide the present value of unlevered free cash flows. 2. Evaluate the weighted average cost of capital. 3. Appraise the value of tax shields. 4. Access the terminal value. 5. Estimate the present value of non-operating assets. 6. Applying the illiquidity discount. 2. What discount rate should
Premium Weighted average cost of capital Free cash flow Net present value
shows that the value of the firm is equal to $1175.03 million. [pic] [pic] For the calculation of the firm value the WACC is used by considering current debt equity ration ( .50). WACC is calculated as follow – [pic] [pic] The free cash flows of the firm would be discounted on the basis of this rate. The valuation and current merger price shows that Birdie should precede with the merger as it would be beneficial for the company to increase its profitability in long term. The expected
Premium Stock market Stock Free cash flow
study will be given a week before the exams * Free Cash Flow Technique * Question 1 Chapter 8 Financial Option * The Block-Scholes Option page 319 * Question 2 Earning Multiples * Excel Spreadsheet Chapter 13 QUESTION 1 20 marks QUESTION 2 Use multiples (Acquisition/Merger) 40 marks QUESTION 3 Case Study (What informs growth‚ what informs the return you are expecting) DO THE WALMART CASE AS AN EXERCISE To study cash flows Time value of money Ration Analysis Standard
Premium Management Scientific method Free cash flow
results‚ we still delivered solid earnings and focused on creating value for our shareholders by repurchasing 99 million shares for $2 billion and doubling our dividend. We continued to improve our financial strength and ended the year with $3 billion of cash and investments. And we made notable progress against our longer term growth initiatives‚ including the launch of Forth & Towne and the development of an entirely new e-commerce platform. We fully recognize‚ however‚ that our long-term success depends
Premium Income statement Banana Republic Free cash flow
Produce individual modules Testing and auditing Protection as an application Documentation Financial Modelling in Excel (2 Days) (A) Corporate Financial Statements 1. 2. 3. 4. 5. 6. 7. 8. Profit and Loss Account Balance Sheet Financial Ratios Cash flow statement Identify the information contained in the three main financial statements Basic concepts - NPV‚ IRR‚ Amortization‚ Debt repayment‚ etc. Ratios used in long and short term risk return analysis - DSCR etc. Making and analyzing projected
Premium Discounted cash flow Financial statements Spreadsheet
Executive summary Vodafone AirTouch‚ one of the world’s leading international mobile telecommunications companies‚ was considering launching a formal hostile bid for Mannesmann‚ a German telecommunications company which is also among the largest telecommunications companies in Europe. If this come true‚ it will become the largest hostile takeover in the world. But now we are facing one of the biggest problems during this process---valuation of Mannesmann. After our discussion‚ we decide to use
Premium Stock market Free cash flow Generally Accepted Accounting Principles
over 22 different brands worldwide. (Global Brands‚ n.d) 2. In the past year they went above and beyond with their financial goals. 3. Pepsi is successful with advertising and marketing. 4. The company has a strong free cash flow at $8.2 billion. (Annual Report‚ p. 1) 5. With good cash flow Pepsi have a greater capacity to expand into other markets. 6. In the past ten years Pepsis net revenue compounded annually growth rate was 9%. (Annual Report‚ p. 4) 7. They support efforts to keep clean fresh
Premium Cash flow Annual report Pepsi