BF322: Advanced Corporate Finance Case Study – Arundel Partners: The Sequel Project Group Members: Chen Yanheng Loon Shu Juan Melissa Ong Joseline Tan Hui Kiow Fundamental Analysis Arundel Partners is an investment group‚ set up to purchase sequel rights associated with films produced by one or more major U.S. major studios. By owning such rights‚ Arundel will be able to wait and see if the movie was successful‚ before deciding whether to exercise its right and produce a second
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Martin’s regression analysis different from/similar to traditional multiples analysis? 1.3. Do you agree with her interpretation of the regression analysis? 2. Consider the DCF analysis presented in Exhibit 7 Please describe the method of “Discounted Cash Flows” using case numbers and answer to the following questions: 2.1. How reasonable are Martin’s forecasts for EBITDA and her assumptions about the asset intensity of the business? 2.2. How plausible is Martin’s terminal value multiple? 2.3
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the equipment is installed in December 1986. II: General Framework for Financial Analysis: “Net Present Value (NPV) is a method of ranking investment proposals using the NPV‚ which is equal to the present value of the project’s free cash flows discounted at the cost of capital. (Brigham‚ 2009)” Simply stated the NPV of a proposed project allows organizations to determine whether or not the project is worth pursuing. It shows how much the project will contribute to shareholder wealth (Brigham
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the Capital Cash Flow method. The Capital Cash Flow method‚ when applied appropriately‚ should yield the same valuation when discounting a company’s Free Cash Flow. To get Capital Cash Flows (CCF)‚ Net Income is adjusted by adding back non-cash expenses and other reconciliations to form cash flow‚ decreasing Capital Expenditures‚ decreasing changes in Net Working Capital and finally‚ adding Cash Interest. The Capital Cash Flow Method is algebraically equivalent to the Free Cash Flow Method because
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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 companies as defined
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curve? 7 Shape of the yield curve? 7 Factors that affect the slope of the yield curve 8 (b) Yield curve graph 10 3. Valuation of the shares for Lloyds Company 11 Valuation Methods 12 Earnings based method 12 Asset based method 12 Discounted Cash flow methods i.e. (free cash flow or Dividend valuation method) 13 4. Evaluation of stock value results 14 Asset-based approach 14 References 16 APPENDIX 17 Appendix 1 17 Appendix 2 18 INTRODUCTION Lloyds banking group is a produce of the fourth oldest bank
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significantly larger market share than those same adversaries. But with the new increase in demand‚ a lack of borrowing power‚ a very “loose” accounts payable collection system and a growing inventory pool‚ Cape Chemical ran into cash flow issues. Since they are running into cash flow issues now‚ even with double-digit growth rates year over year‚ we can only assume that the company will have a even larger financial burden when those same normal‚ growth rates slow. I have outlined three scenarios‚ all of which
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valuation cases 2. WACC • Cost of equity‚ choosing beta‚ choosing weights‚ when to use premium. 3. Valuation using Discounted Cash Flow (DCF) • Key assumptions‚ Terminal Value‚ sensitivity 4. Valuation using multiples • Key points‚ pros & cons‚ choosing comparable firms • Which multiple? Which year? Example. 5. Financing an Acquisition • Determine price. Financing. Making a decision. 6. Final exam • How to review‚ how to approach the case 1. OVERVIEW OF VALUATION CASES
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Midland Energy Resources Midland Energy Resources is a fully integrated energy company with operations in E&P‚ Refining & Marketing (R&M) and Petrochemicals. Capital budgeting at Midland is done using discounted cash flow method and weighted average cost of capital (rwacc). Corporate Weighted Average Cost of Capital‚ rwacc The primary use of the corporate rwacc is valuation (TV=FCF/(rwacc-g)). While the rwacc may be used for evaluating internal projects‚ the usage will be incorrect owing to the
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A Mini Case of Little Stone Comapny Question-1 Big Rock Corporation (BRC) announces a tender offer for all the shares of Little Stone Company (LSC) for $16 per share. The pre-announcement (one month before) price of LSC was $12. LSC stock quickly rose to $15.50. Previous similar acquisitions by peers paid an average premium of 20%. Financial information on Little Stone Company: Beta 1.5 Stock market risk premium 11% Risk free rate 3% Current interest rate on debt 15%
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