As long-term valuation is assumed‚ risk free rate is set as 30-year treasury rate‚ 5.73%. Cost of debt is 6.72% reflecting Amoco’s credit level. Cost of equity is calculated as 10.63%‚ leading to final WACC at 8.85% (Chart 1). In DCF valuation (Chart 2)‚ long-term growth rate is assumed to be 4%. Change in working capital is calculated as the average of 1997 and 1996 figure and is assumed to be constant for simplicity. Terminal value is valued at $69‚398.1 million and NPV is $51‚525 million. Stock
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acquisition is to enhance Timken’s market share and product base. Operating synergies are highly expected from this merger with 80 million cost savings by the end of 2007. The presented analysis‚ recommends in our opinion‚ the best course of action in the proposed acquisition of the Torrington Company: * Both companies operate and compete in same business and therefore‚ Timken is seeking substantial operating synergies from this largest acquisition of its history (80 million cost savings by the
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1) What are Virgin Group’s distinctive resources/capabilities?The Virgin BrandFirstly‚ the Virgin brand is valuable in the form of brand equity‚ where ‘Virgin’ is one of the most recognised brand names in the UK‚ and is also well-known in other important markets including Europe and the U.S.A. Based on 1990s research‚ the Virgin brand was recognised by 96% of UK consumers (Case‚ p.685). Secondly‚ it is rare for a brand to have such positive consumer perceptions; which include value-for-money‚ fun
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Stand-Alone Value There are many valuation methods that could be used to evaluate this company. Finding a method that valuates the stand-alone value is difficult. The stand-alone value should be dependent upon the firm’s own assets and projected future income. We decided to evaluate this company based upon two methods: The Discounted Cash Flow Method and the Comparable Companies Method. Discounted Cash Flow Method takes the forecast free cash flows during forecasted horizon. Then we estimate
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faced by the merged entity. It also explores the enormous cultural differences and management styles and the problems to realize the synergies identified prior to the merger. Why did they decide to merge? At the time of the merger both the companies were hugely profitable and the purpose was to ensure long-term prosperity as well as exploit large potential synergies. The production and market concentration matched each other very well. Chrysler so far had failed to establish greater geographical
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achieved by sharing resources common to different products. Commonly referred to as "synergies." * Increased market power (over suppliers and downstream channel members) * Reduction in the cost of international trade by operating factories in foreign markets. Sometimes benefits can be gained through customer perceptions of linkages between products. For example‚ in some cases synergy can be achieved by using the same brand name to promote multiple products. However‚
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figure 1.1 for an example of the corporate parent of an organization. Fig 1.1 – Simple Multi-business company example 3.0 Corporate Rationale There are four main corporate rationales that an organization can have: portfolio manager‚ restructurer‚ synergy manager and lastly‚ parental developer. 3.1 Portfolio Manager In the portfolio manager rationale‚ the corporate parent acts as the financial markets and
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"It’s more fun in the Philippines" Campaign slogan in Philippine Tourism Introduction: Last January 2012 the Department of Tourism launched the new slogan “It’s more fun in the Philippines” to raise the awareness of the locals and the tourist who are still unaware of the beauty of the Philippines. The said slogan created a question in our mind. What will be difference of using this new slogan over the old one “ Pilipinas kay Ganda” ‚ will it be more effective to attract tourist and help to promote
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issue 6 | 2 010 Complimentary article reprint Post Merger integration: Hard Data‚ Hard Truths By johanneS gerdS and freddy Strottmann with PakShalika jayaPrakaSh > illuStration By VinCe mCindoe This publication contains general information only‚ and none of Deloitte Touche Tohmatsu‚ its member firms‚ or its and their affiliates are‚ by means of this publication‚ rendering accounting‚ business‚ financial‚ investment‚ legal‚ tax‚ or other professional advice or services. This publication
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fuse in 1998. But not even ten years later Daimler-Benz once again sold all its shares of the Chrysler division. The dream to become the third biggest car producer of the world‚ behind General Motors and Ford‚ burst. The expected and wished for synergy effects stayed out. Instead of gaining competitive advantage over their competitors‚ the merger rushed the two car producers ever deeper into the crisis and did not provide the companies with the necessary tools to overcome the recession. The presented
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