are the tradeoffs in using multiples versus the DCF analysis? Answer: DCF Valuation ; Martin forecast revenue for each year for from the firm’s financial data‚select appropriate discount rate based on WACC‚ discount each cashflow back to it present value‚ obtain the terminal value through an application of terminal value multiple‚ using DCF method‚ Martin calculates the price of Cox’s share to be $54.29. Multiple Valuation; Identify comparable firms that have growth‚ cashflow and risks similar to
Premium Discounted cash flow Firm
the case didn’t provide us with the financial statements for Monmouth‚ we can assume that in order to complete the acquisition they have to issue stocks as they exhausted (or will pretty soon exhaust) their debt capacity. 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
Premium Market value Risk Generally Accepted Accounting Principles
Introduction Ducati nearly faced on bankruptcy 1996 though it has good reputation on the famous mechanical system and its unique extreme performance. In the fierce competition with the domination by Japanese companies with high technology‚ it is difficult to survive or even recover from bankruptcy. Fortunately‚ the explosive growth and profitability occurred from 1997 led by the CEO‚ Federico Minoli. This document is the case study of Ducati recovering to a position owing a certain amount of market
Premium Strategic management Motorcycle Quality control
Optimal Risky Portfolios 23 Chapter 9 The capital asset pricing Model 24 Chapter 11 The Efficient Market Hypothesis 25 Chapter 12 Behavioural Finance and Technical Analysis 26 Chapter 17 Macroeconomic and Industry Analysis 27 Chapter 18 Equity Valuation Models 28 Chapter 19 Financial Statement Analysis 29 Chapter 24 Portfolio Performance evaluation 30 Chapter 27 The Theory of Active Portfolio Management 31 Information about the unit Welcome to: BUS311 Investment Analysis
Premium Asset The Unit Financial statements
Analysis of External Environment of Ducati (Answer of Q. 2) In classical strategy literature‚ competitive advantage of a company is generally attributed to the management’s ability to position the company’s assets against some external context (Mintzberg et al‚ 2005 & Juga‚ 1999). This external context is referred (Porter‚ 2004) as external environment for a particular company. According to Johnson et al (2008:54)‚ the environment is what gives organisations their means of survival.” So‚ it
Premium Strategic management Management Marketing
Harvard Business Case: Ducati Introduction After the introduction of Federico Minoli‚ Ducati has transformed from a company on the verge of bankruptcy into one of the most profitable motorcycle manufacturers in the world. But this is not enough for Minoli‚ who currently considers entering the Harley Davidson niche: introducing a Ducati cruiser. However‚ according to the analysis below – prepared using some basic strategic questions - this would not be a very wise
Premium Motorcycle Harley-Davidson
Guide for assignment Executive Summary - Summarize the content of the whole report. Highlight anything that you feel is very important. About half to one page long Do not share with other content Opinion of value Mention your proposed selling price. Suggest whether your boss should buy the business or not. Support your claim. Should mention that opinion has been made under the assumptions and limiting conditions. About one page Do not share with other content Assumptions and Limiting
Premium Asset Balance sheet Rate of return
Ducati is looking to continue to drive growth by taking market share from current competitor Harley Davison. The firm plans to attack the market niche of Harley Davison with the Ducati interpretation of its cruiser. This is a misguided way to drive sustainable growth in the long term. Harley Davison is a major American motorcycle manufacturer‚ and dominated the U.S. heavy weight motorcycle market. In 2000m Harley produced 204‚500 motorcycles a 15.5% increases over 1999. Relative to other major
Premium Motorcycle Harley-Davidson Marketing
Nike Executive Summary Kimi Ford manages a large mutual fund for NorthPoint Group. Her company is trying to decide whether or not to invest in Nike’s stock‚ which has been declining in price in the past year. Kimi has asked her assistant‚ Joanna Cohen‚ to estimate Nike’s weight average cost of capital (WACC) to help make this decision (Case 13‚ pg. 58). We looked at Joanna’s estimates and discovered a few problems that she made when estimating her cost of capital. We found Joanna’s estimates
Premium Generally Accepted Accounting Principles Investment Financial markets
Assignment: Case No. 2 ACTG 4650‚ Phillips Due date: June 28‚ 2012 Trueblood Case 04-9 Healthcare Depot‚ Part 3 only. You will find the case at the following website. Just pagedown to find case 04-9. http://www.deloitte.com/us/truebloodcases Since we are not doing parts 1 and 2‚ assume that DDC Distribution and HC Holding are aggregated to be one reporting unit. Type your answers using Microsoft Word. “Goodwill is defined as an asset acquired in a business combination
Premium Generally Accepted Accounting Principles Balance sheet Asset