contains critical information that gives you a reasonable basis to compute its valuation. In addition use the following information for 1995.1 Sales ($ millions) Redhook Pete’s BBC 25.89 59.17 151.31 EPS .75 .25 .40 Book value/share 7.70 4.33 3.00 Price 27.00 24.75 ? Also‚ use the following information for BBC for 1996. Make additional assumptions as necessary (and state any additional assumptions) to compute free cash flows for subsequent years: 1. The ratio of Net profit before taxes to sales is
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ratio. YVC’s has no outstanding debt. We first had to compute return on equity and return on debt. To calculate return on debt for TSE we have taken the rating of a Baa Corporate Bond. To find the present value of the future cash flows we used the discounted cash flow (DCF) method. It can be used to find the fair value of a firm. This
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Q1. If we want to do the stand-alone-valuation for Framedia at the end of 2005‚ we should calculate the free cash flow to firm after 2005 and the residual value of Framedia and then discount all the cash flows to the end of 2005. Because it’s stand-alone-valuation we should do‚ we need to value the whole firm and then compare the stand-alone-value with the synergistic value after the merger. So it’s the firm value we should compare with. We can get the effective tax rate by dividing the profit before
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Solution maf420 Question 1 a) Kettle : 3000 unit per month : 1‚500 kg of Material L Rice cooker : 1000 unit per month : 1‚500 kg of Material L So‚ the ratio is 1:3. If the company wishes to fulfill all the targeted kettle produce‚ therefore they should use all the material available to produce rice cooker for produce that component. From here‚ we can conclude that‚ the company need to scarified 1000 unit of rice cooker to produce 3000 unit of kettle. The total contribution lost is….
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Chapter 7 Stock Valuation Solution to Problems P7-1. LG 2: Authorized and Available Shares Basic (a) Maximum shares available for sale Authorized shares 2‚000‚000 Less: Shares outstanding 1‚400‚000 Available shares 600‚000 (b) $48‚000‚000Total shares needed 800‚000 shares$60== The firm requires an additional 200‚000 authorized shares to raise the necessary funds at $60 per share. (c) Aspin must amend its corporate charter to authorize the issuance of additional shares. P7-2. LG 2: Preferred Dividends
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incestment creates wealth if the discounted value of the future cash flow exceeds the up front cost. The problem is what to discount- stick to these rules: 1. Only cash flow is relevant. Net present value depends on future cash flows it’s the difference between cash received and cash paid out. Cash should be recorded only when they occur and not when work is undertaken or a liability is incurred. Ex: taxes should be discounted from their actual payment date. 2. Estimate cash flows on an incremental basis
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future cash flows 4 NET PRESENT VALUE Cash revenue year 1 Note: cash in the future is worth less than cash now‚ so we discount it + + + + Cash revenue year 2 Cash revenue year 3 Cash revenue year 4 Cash revenue year 5 etc... Linking Market-Based Assets to Shareholder Value Usage‚ impact on repeat usage perceptions‚ image‚ satisfaction‚ awareness‚ knowledge Market-Based Assets Market Performance Shareholder Value Customer Relationships: Faster Market Penetration Accelerate Cash Flows
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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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Budgeting - Working Capital Management - Financial Delegation - Financial Reporting - Profitability of Central Public Sector Undertakings 3. Role of financial management in the reforming of psu’s - Performance Evaluation in PSU’s - Valuation of Public Sector Undertaking - Valuation Techniques - Pricing in Acquisitions - Disinvestment 4. SWOT analysis of financial management in psu’s 5. Conclusion INTRODUCTION A public sector undertaking may be defined as a business undertaking‚ which is owned managed
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this project’s NPV we had to find the respective cash flows in each year from the initial investment to the end of the five year forecast provided in Exhibit 2 at the end of the case. The initial investment for the building and all the equipment would take place in 2003 and production would begin in 2004. Therefore‚ our “Year 0” was 2003 and we calculated cash flows from operations from 2004 to 2009. To begin analyzing the case we started with cash outflows from investment. The text stated that there
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