Week 8 Case Study – JetBlue Man Hon Chan 22002960 Introduction An initial public offering (IPO) refers to the initial stage of shares offering to the public market for subscriptions by a company to raise capital for the purpose of expansion. It is considered as a big issue for companies as an IPO does not necessary guarantee the success of a company as it is merely a tool of raising capital while its costs of issuance and consecutive monitoring costs (due to diluted shareholdings of the
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CHAPTER 1 OVERVIEW OF FINANCIAL REPORTING‚ FINANCIAL STATEMENT ANALYSIS‚ AND VALUATION Solutions to Questions‚ Exercises‚ and Problems‚ and Teaching Notes to Cases 1. Value Chain Analysis Applied to the Timber and Timber Products Industry. Exhibit 1.A below contains a depiction of the value chain. The links in the value chain are as follows: 1. Timber Tracts: Plant and maintain timber tracts (Weyerhaeuser) 2. Logging: Harvests timber (Weyerhaeuser) a. Sawmills:
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Eskimo Pie Corporation Eskimo Pie: IPO Vs. Buyout 1991 Student Report Prepared on 03/29/2015‚ by: Parker Scott – u0866636 Eskimo Pie Corporation Eskimo Pie: IPO vs. Buyout 1991 EXECUTIVE SUMMARY In early 1991‚ Reynolds Metals Company had a decision to make. Goldman Sachs investment bank has facilitated a potential acquisition of Reynolds’ subsidiary‚ Eskimo Pie to Nestle Corporation. Throughout the years‚ Eskimo Pie has been independently operated and this acquisition would consolidate
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SWOT ANALYSIS Strengths JetBlue find its strength from the following: Strong Brand JetBlue is considered as a strong brand widely known among the people of US. JetBlue was named the number one U.S. domestic airline by Coned Nast Traveler magazine’s “Readers’ Choice Awards” for the six years in a row. This further strengthen people’s trust to JetBlue and improves the company’s brand name and credibility among its clients and competitors. Unique flying experience JetBlue offers a new flying experience
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BUS 3303 Finance Course review Ale Previtero AGENDA 1. Overview of 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
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Rosario Acero S.A. Teaching Note Synopsis and Objectives In March 1997‚ the board’s chair of this small steel mill was pondering how to finance the growth of his firm: either with an initial public offering (IPO) of equity or through a private placement of eight-year senior notes with warrants. The task for the student is to sort out the comparative advantages and disadvantages of each alternative—including valuing the possible securities—and then recommend a course of action. These are the
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Securities Mutual Fund vs. Hedge Fund Market Price P0 Implied Return‚ Yield to Maturity Default Risk vs. Price Risk Business Investment vs. Capital Investment Passive Investor vs. Active Investor (Speculator) Valuation‚ Comparables Approach vs. DCF Approach Private Market‚ Public Market‚ IPO Liquidity‚ Excess Volatility Corporate Finance and Investment Management Formulas for the A1 Lecture C = c * Face PA/EA = PB/EB (setting the price to earnings ratio to be equal for two firms) Conceptual
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Guidelines for written case analysis Working in teams of up to four students your task will be to recommend an IPO price for the Boston Beer Company‚ Inc. Your grade will be based on your answers to the assigned case questions. You do not need to list the question and then your answer (as you might do for a problem set). The questions are there to serve as a guide to arrive at the solution of the case. As such‚ answers to these questions should be integrated as part of the report and you are
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Company- Case Analysis You are the investment banker assigned with the task of setting the IPO price for Boston Beer Company (BBC). Prepare a research report to support your recommendation. As you prepare this report‚ you may find that you would like to have more field information than what the case offers you. However‚ the case 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
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initial public offering valuation would be most appropriate for Goldman Sachs & Co. to use? II. Alternative Solutions 1. Industry Comparables 2. DCF model III. Analysis of Alternatives In order to compare Goldman Sachs to companies in its industry the information in Exhibit 2 of the case has to be used. A way to compare the information given to Goldman Sachs is to find the average of the comparable companies’ information to use it to find an approximate IPO for Goldman Sachs. The average
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