CASE QUESTIONS Cash Flows and Value. Cost of Capital Case 1: Hop-In Food Stores‚ Inc. 1. Determine the correct price for this particular IPO. Use several methods to do this and compare them. 2. What extra information would you try to acquire in a real life situation? Case 2: Chem-Cal Corporation 1. How do you calculate the WACC for this firm? 2. What is the cost of capital of the debt‚ preferred stock‚ and common stock (assume the equity beta is 1.22)? 3. Calculate the WACC. How can a WACC be used
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PitchBook 4Q 2012 Private Equity Sponsored by Breakdown Bet ter Data. Bet ter Decisions. PitchBook 4 Table of Contents Intro Letter ............................................................................. 1 Private Equity Deal Flow ........................................................... 2 Investments by Deal Size .......................................................... 3 Private Equity Add-on Activity ...................................................4 Investments
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are all under the umbrella of Upson Holdings Corporation. At present‚ they carry most of the IT leaders’ brand name in the market such as ACER‚ COMPAQ‚ HEWLETT PACKARD‚ CANON‚ EPSON‚ MICROSOFT‚ INTEL‚ A-OPEN‚ 3M‚ LOGITECH‚ APC‚ MGE‚ PULSAR‚ 3COM. SEAGATE‚ ASUS‚ MICROSTAR‚ JETWAY‚ CALIDAD‚ KRONE‚ AMP‚ LIKOM. EXPRESS and other peripherals & accessories. II. Company Goals To provide quality and state-of-the art products to our valued costumer. To provide a fast and reliable technical services
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unrated or rated below investment grade by the credit rating agencies Typically yield about 1-2 percentage points below yields on U.S. Treasury debt of comparable maturities. Junk bonds are commonly used source of “permanent” financing in LBO transactions During recessions‚ junk bond default rates often exceed 10% None of the
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Kinder Morgan - MBO Richard Kinder and Bill Morgan purchased a master limited partnership pipeline company from Enron for $40 million in 1997‚ founding Kinder Morgan‚ Inc. (KMI) 1. The primary benefit of an MLP comes in the form of tax savings. While shareholders in a corporation face double taxation‚ owners of a partnership are taxed only once (when receiving distributions). Corporate income tax does not exist in the partnership. When cash distributions to MLP owners exceed
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arising new entity. Private equity is split up into Venture Capital and Leveraged Buyout funds‚ with a little made up of mezzanine funds. LBO companies buy publicly traded companies that are experiencing inefficiencies from costly regulation of being publicly traded and the incentives of managers and shareholders. The growing overlap is correlated between the LBO side of private equity and the more recent trend in hedge funds of acquiring large stakes in mature‚ failing companies in order to have
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FINANCE 394.4 – Financial Management of the Small Firm Course Outline –Spring Semester‚ 2011 TTH 8:00-9:30; 9:30-11:00 – UTC 1.104 (Unique #03190‚ #03195) TTH 12:30-2:00 – GSB 3.106 (Unique #03200) Office Hours: TTH 11:00 – 12:15; 2:00-3:00 Professor: Jim Nolen & by appointment Office: GSB 4.126G Phone: 471-5798‚ Fax 471-5073 TAs – Devang Gardi (8:00); Vivek Ponnada (9:30) Peter Song (12 :30) e-mail: james.nolen@mccombs.utexas.edu Office Hours – By Appointment Course Material Posted on
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intermediaries in private equity. Class Four February 14 Valuation in a Private Equity Setting Guest Speaker Morris Sandler Introduction to the US LBO Industry Private Equity Information Sources Required Reading Brazos Partners The CoMark LBO Case Due Note on Valuation in Private Equity Settings (HBS 9-297-050) Case 4 Brazos Partners The CoMark LBO The partners of a new midmarket buyout fund are working on a buyout of a closely held modular building company. Although originally structured as
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arrive at a value of equity. The analysis above suffers from the fact that it is a highly levered transaction using a constant WACC discount rate‚ when in fact the leverage is changing rapidly. One solution is to use APV. Another is to use the LBO technique‚ which is what I want you to do in this case‚ using the following: -Ignore non operating assets initially -Assume same debt as case above but that debt is paid down with any positive cash flow each year. Don’t forget to adjust
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Rich get Richer and Poor get Poorer In today’s world people want to be healthy‚ happy and well educated and most want to own some type of capital. They also want to be well paid for the work that they do and they prefer to pay as little tax as possible. While everybody is happier when the rate of inflation is low and when the economy is growing and everyone is getting better off. In booming economic times‚ such as we recently have enjoyed‚ the only problem is that "the rich get richer and the poor
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