revenue side‚ they expect to steal market share both from the trucks and Norfolk Southern which will have an annual impact on EBIT of $ 180 million. The DCF valuation led to a value of $11.2 billion and the transaction multiples to a value of $10.8 billion. The proposed bid of $8.3 billion made has an implicit growth rate of 1% in the DCF valuation and an implied EV/EBITDA multiple of 8.2x. This is regarded has too low since the inflation rate is expected to be at 3% and so the revenues are expected
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Operating Profit 45 Price / Earnings 82 Using the three multiples above‚ we came up with valuations of $44/share‚ $49/share and $53/share for West Teleservice. Compared to the S&P recommendation of $21.5/share‚ this seemed to be much higher evaluation. Based on this analysis however‚ Ms. Little would likely recommend a valuation of $44/share. We then proceeded to value West Teleservice using the DCF method. In using the method‚ there were a few fundamentals about the teleservice industry that
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support your recommendation. As you prepare this report‚ you may find that you would like to have more field information than what the case offers you. However‚ the case contains critical information that gives you a reasonable basis to compute its valuation. In addition use the following information for 1995.1 Redhook Pete’s BBC Sales ($ millions) 25.1 58.7 150.8 EPS 0.78 0.22 0.47 Book Value/ Share 7.92 4.24 3.02 Price 27.35 24.80 ? Also‚ use the following information
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Paramount Communications Inc. Question 1 Paramount is a takeover target because other firms see synergy value associated with combining Paramount’s assets and operations with their own. Specifically‚ Paramount has several assets that complement other media companies. Value in the media is generated through several different channels. As a media company‚ Paramount has a presence in most of the entertainment sectors (see Exhibit 2). There seems to be a drive toward consolidation and several industry
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7-2 Constant Growth Valuation Boehm Incorporated is expected to pay a $1.50 per share dividend at the end of this year (i.e.‚ D1 = $1.50). The dividend is expected to grow at a constant rate of 7% a year. The required rate of return on the stock‚ rs‚ is 15%. What is the value per share of Boehm’s stock? P = D1/(rs – g) Price = $1.50 / (0.15 - 0.07) = $18.75 7-4 Preferred Stock Valuation Nick’s Enchiladas Incorporated has preferred stock outstanding that pays a dividend of $5 at the end of
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PARAMOUNT AS A TARGET WHO IS INTERESTED MORE ? BIG DIVERSIFIED MATURED BRANDED 1 BACKGROUND PARAMOUNT COMMUNICATIONS ESTABLISHED PRESENCE: TYPE OF BUSINESS: • Entertainment/Motion Picture production and distribution 1934 Worldwide Gulf & Western previously‚ name changed after acquisition of Paramount Pictures TYPE: HQ: Public NYC‚ New York‚ US • Publishing 2 BACKGROUND VIACOM ESTABLISHED PRESENCE: TYPE OF BUSINESS: • Networks • Cable Television • Entertainment
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Problems (p. 297) 7-2 Constant Growth Valuation Boehm Incorporated is expected to pay $1.50 per share dividend at the end of this year (i.e.‚ D (1) = $1.50). The dividend is expected to grow at a constant rate of 7% a year. The required rate of return on the stock‚ r(s)‚ is 15%. What is the value per share of Boehm’s stock? 1.50 / (0.15 – 0.07) = $18.75 7-4 Preferred Stock Valuation Nick’s Enchiladas Incorporated has preferred stock outstanding that pays a dividend of $5 at the end of each
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Thomas Nickerson‚ the young boy whose father was not born on Nantucket‚ is already discriminated against to be hired because his father was not born on Nantucket. The whalers of Nantucket are who all of the kids on the island idolize along with all of the women and for a woman who marries a whaler‚ she must be very independent. The sacrifice that these men must make is hefty
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893 VALUATION Relative Valuation – Based on Multiples Bharti Airtel and Zain Africa recently announced signing of the definitive merger agreement‚ wherein Bharti will acquire African operations of Zain Group. The deal was valued at an enterprise value of USD 10.7 billion or on an 8.2x EBITDA Multiple. Goldman Sachs has invested USD 450 million in online social networking portal Facebook‚ which is valued as the number one social networking network at USD 50 billion. At an enterprise value
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