Dow Chemical Case Question 1 Polyethylene is the world’s most widely used plastic. Polyethylene plastic’s principal application was in packaging‚ from trash bags to milk jugs. It was widely used in the manufacture of everything from trash bags‚ picnic cutlery and garbage pails‚ to plastic toys. Polyethylene also replaced glass‚ wood‚ and metal in certain applications. There were three types of polyethylene‚ Low-density polyethylene‚ High density polyethylene and Low linear density polyethylene
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gap between payables and receivables. Such a long cycle allows large cash reserves and profitability in any business‚ and all the more so in the bookstore industry. Traditional brick and mortar bookstores have a negative cycle‚ where payables are executed 90 days after entering inventory‚ but average receivables come in at 168 days after entering inventory. Thus‚ a -78 days gap exists between receivables and payables‚ draining cash from the company. The faster payables period (58 vs 90 days) is also
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assets‚ determine the cost of capital‚ evaluate capital structure and dividend policies‚ and know the basics of raising capital in order to make informed investment and financing decisions. Topic areas will include financial performance measurement‚ valuation‚ capital budgeting‚ capital market theory‚ basics of investments‚ cost of capital‚ raising capital‚ and capital structure and dividends. Instructor: Daniel McConaughy Office: JH4103 Office Hours: Tuesday‚ Wednesday 6:00-6:30 PM and by appointment
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JetBlue IPO WACC The estimation of cost of capital for JetBlue proved to be a difficult process. Considering the company has an unfavorable capital structure‚ due to the fact that they are acquiring a large number of aircrafts‚ simply taking the weights of debt and equity are not acceptable. In order to accurately judge the discount rate the multiples method is necessary. The comparison was to a leading low-fare airline company‚ Southwest. Another critical point is that taking the book
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European markets as a whole. As a part of this expansion and diversification plan‚ Palamon Capital expects to purchase a controlling stake in an Italian software company‚ TeamSystem S.p.A.. After analyzing TeamSystem S.p.A.’s financial statements and cash flows‚ going fourth with the controlling investment is a great opportunity for Palamon Capital as a company in order to expand westward into Europe. Not only is it a great growth opportunity‚ but Palamon Capital is getting great value for their money
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2. What is the maximum price they could expect to pay Monmouth‚ based on an analysis of valuation using discounted cash flow‚ calculation of WACC and terminal value determination? 2. Based on the DCF valuation and using a WACC of 8.25% (the beta assumed to be 1‚ the average beta of comparable firms and the coupon rate to be 7.96%‚ the rate for BB rated companies) and a growth rate of 5.5%. The fair price is $40.4 per share for Robertson‚ lower than the $50 offered by Simmons to sell their
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emphasis on more advanced valuation techniques. While most of her competitors were content with metrics such as EBITDA multiples‚ Martin had chosen to emphasize discounted cash flow analyses and EVA analyses. Recently‚ her attention had shifted to real options analysis as she felt other valuation metrics neglected an important aspect of the cable industry. ROIC Target Price Analysis Using regression analysis‚ Martin analysed the relationship between ROIC and the valuation of cable and entertainment
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CompuTech was founded by Marco Garibaldi in 1983. The founder developed a user-friendly word processing computer program‚ which received wide acceptance from both the academic and the business communities. A presentation package was developed by the company’s programmers‚ and the software also received wide market acceptance. However‚ Computech had a hard time when it decided to enter the financial spreadsheet market. Due to late entrance into the market‚ the company would face fierce competition
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whether CEOs of McCaw Cellular Communication and AT&T agree on an appropriate price of the company. In order to capture the value of McCaw Cellular Communications‚ three financial valuation models were developed while taking into account the trends in the industry and potential synergies from the take-over. Valuation Model #1: Comparable Transactions: As mentioned in the business life cycle section( Exhibit A)‚ cellular companies are in huge demand due to their outstanding growth potential. From
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in-depth analysis of this company cost of capital and multiple valuation techniques as a reduction of Guillermo financial risks. With these evaluations there will be a determination of the present value net as well as base of its expected future net cash flows. This determination will be made by a variety of financial concepts that will be determined by gathering Guillermo present value of net to improve the company’s future cash flow. A brief description of the company cost of capital that is the
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