Grade 9‚0 Corporate Finance II Interco Advanced Valuation Comments from teacher: In question 1‚ why do we use these equitation’s‚ explain and show then‚ i.e. ROE can go up with more leverage. More on comparables. In Q1 assumptions explained‚ that are then used in DCF. Max for question 1 and 2‚ two pages. Must power to put in Q3. Deduct tax in table 3. In DCF‚ show more how calculated and assumption missing about other income and corporate expenses. Table 6 to be fixed (already been done)
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Executive Summary If anyone on the street hears about Warren Buffett‚ they might have heard of that name as one of the wealthiest person in the world. But if that person is involved in the business world‚ that name would identify one of the most successful investor who ever lived. Although born and raised in the medium-sized town‚ he was taught to be an investor from a young boy. Influenced throughout his life from Benjamin Graham‚ Phil Fisher‚ and Charlie Munger‚ Buffett used most of what he learned
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A la hora de analizar este caso‚ aplicaremos lo visto tanto en la nota técnica de “valoración de empresas. Un resumen” como lo comentado en el propio caso sobre las características de la evaluación de proyectos de inversión hoteleras. Para el cálculo y jerarquización de los diversos proyectos de apertura de hoteles‚ se utiliza un procedimiento estandarizado (normalizado) y cuidadoso que parte de las siguientes reglas: a.Preparación de las cuentas de resultados y balances previsionales de los 10
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Interpret Interco’s financial performance. Why is Interco the target of a hostile takeover? What are your interpretations of the Board of Directors in case Exhibit 1? As a member of Interco’s board are you persuaded by the premiums paid in case Exhibit 10 or the comparable transactions analysis in case Exhibit 11? Why? Apr. 27 Interco (C) continued: Compute the estimated value of Interco based on instructions in Exhibit 34. Use the 1988 sales data in Exhibits 8 as the foundation for the sales
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1. Several factors have made Interco an attractive takeover target: 1) Interco’s stock is undervalued due to poor performance in the apparel and general merchandising divisions‚ which have weakened Interco’s valuation as a whole. 2) As stated by the equity analysts‚ Interco is an over capitalized company with potential to grow‚ which makes an acquisition easy to finance. 3) Interco is also a cash generative target for a potential acquirer as it generates approximately $0.10 of operating cash flow
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Study Questions for Interco Case: Interco (Valuation approaches) 1. Assess Interco’s financial performance. What measures would you use? 2. Why is the company a target of a hostile takeover attempt? 3. Can you demonstrate that the valuation range of $68-$80 per common share follows from the assumptions in Exhibit 12? Which assumptions would you question? 4. Do you think the raider is justified in offering $70/share? 5. How would you advise the Interco board on the $70 offer
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They are Interco Rear‚ Interco TSL Vampires‚ Jeep Super Swamper ATV tires by 4wd‚ Super Swamper Bogger …… What products for the cheap super Swamper ATV tires? There are a few good products for the cheap super Swamper ATV tires. But I would like to recommend you B-132 Bogger
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Finance 725 Spring 2006 J. E. Hodder Corporation Finance Course Schedule Tuesday‚ January 17: Introduction Thursday‚ January 19: Clarkson Lumber Company Reading: Note on Financial Analysis a. How is the company ’s financial performance? (Examine appropriate financial ratios.) b. Why has Clarkson Lumber borrowed increasing amounts despite its consistent profitability? c. How has Mr. Clarkson met the financing
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Case 3: Interco (Week 13 – not final) 1. Assess Interco’s financial performance. Why is the company a target of a hostile takeover attempt? 2. As a member of Interco’s board are you persuaded by the premiums paid analysis (Exhibit 10) and the comparable transactions analysis (Exhibit 11)? Why? 3. Wasserstein‚ Perella & Co. established a valuation range of $68-$80 per common share for Interco. Show that this valuation
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Mergers & Acquisitions Outline How do lawyers create value? • Protect interests/value • Reduce risk/uncertainty (which affect valuation)‚ increasing options Laws That Affect Mergers • Corporate Law – creating entities to allocate risk; who gets to decide o State law: determined by state of incorporation o Statutes and judicial decision • Securities Law – disclosure o Federal law • Antitrust Law – restraints of trade o Federal
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