Atlantic Corp – case study | | | | Question 1: Is the acquisition of Royal’s Linerboard mill and box plants a sound strategic move? Yes. Atlantic corporation intends to increase its linerboard capacity‚ as it is a net buyer of linerboard. This acquisition of Royal by Atlantic Corporation would be a horizontal integration‚ which occurs when both the firm being taken over and the firm taking over are in the same industry and in the same stage of production. The linerboard industry
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Calculating WACC for Marriot Marriot has three divisions : * Lodging * Restaurant * Contract services Financial Strategy of Marriott * Manage rather than own hotel assets * Invest in projects that increase shareholder value * Optimize the use of debt in the capital structure * Repurchase undervalued sharesunlevered Unlevered Asset Beta Asset beta = (E/V) * Equity betaE = Market value of equity V = Market value of company = Market value of equity
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Sam O’Brien‚ C10390017‚ DT366 yr2 Report on the WACC for Fiat motors The WACC is the weighted average cost of capital. It is a calculation of the firms cost of capital taking into account the relevant weight of equity and debt as a proportion of the total. The cost of equity or KE calculated using a risk free rate example German 5yr government bond‚ the firm’s beta and the return on the market. The firm’s beta is a calculation of the firms exposure to the market‚ a beta of less than 1 indicates
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Royal Asset Package Valuation DCF Valuation EBITDA - Depreciation EBIT - Taxes on EBIT + Depreciation - Capex - WK FCF Wacc Enterprise Value + Terminal Value + working capital Total EV (31/12/1983) EV/EBITDA 1984 EV/EBITDA 1985 EV/EBITDA avg. Terminal Value Growth Capex = Depreciation Monticello Mill financials Revenues Annual Capacity Utilization rate Tons Price per ton EBITDA margin Box Plants financials Revenues EBTIDA margin Combined Package financials Revenues EBITDA margin Depreciation EBIT
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calculate Boeing’s WACC along with IRR to determine whether this is a financially worthwhile project. In order to calculate the WACC‚ Bair must consider the betas from Boeing’s commercial sector as well as the defense sector. One beta cannot be used for the whole company due to the vast difference in volatility between the two sectors. Once these two separate betas are calculated‚ they can be weighted based on the % revenue which each industry contributes to the company and then a WACC can be calculated
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Introduction We focus on SMRT Corporation Ltd (SMRT) and SBS Transit Ltd (SBS). The market for their common equity (E)‚ debt (D) and preferred stock (PS) are summarized here: | |E (SGD$) |D (SGD$) |PS (SGD$) |D/(D+E+PS) |E/(D+E+PS) |PS/(D+E+PS) | |SMRT |309.8M[1] |472.3M |0 |60.39% |39.61% |0 | |SBS |649
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Atlantic Aquaculture‚ Inc. Capital Budgeting with Staged Entry Question 1 A – Even though Atlantic Aquaculture already bought the land needed for 300‚000 USD‚ its value today is 900‚000 USD. We can therefore conclude the 900‚000 USD is an opportunity cost as the land can be sold at this value. B – In this case it is best for the company to use the option to the land acquisition. By calculating the NPV the option is worth $-852‚093.66. Buying the land without the option would bring the company
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Marriot Case Marriot use the Weighted Average Cost of Capital to estimate the cost of capital for the corporation as a whole and for each division‚ and the hurdle rate is updated annually.(WACC = (1-Tc) * (D/A) * R[D] + (E/A) * R[E]) Marriot’s Tax Bracket = 175.9/398.9 = 44% Division’s asset weight to the corporation: Lodging = 2777.4/4582.7 = 0.59 Contract = 1237.7/4582.7 = 0.28 Restaurant = 567.6/4582.7 = 0.13 Risk free rate is 30 years T-Bond = 8.95% (Lodging use long-term debt)
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sharing agreement between Air India and Virgin Atlantic Airlines for the DEL- LON sector. During the last nine months there has been fare wars‚ value added services‚ alliances etc. Suddenly there seems some action in the Aviation Industry‚ where Virgin has acted as a lubricator. There are many other airlines‚ in bid of competition increasing their capacities or increase their flights for the same route. Introduction In the early 80s‚ when Virgin Atlantic was created‚ by Richard Branson was a go
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A Note on Valuation Models: CCFs vs. APV vs WACC Fabrice Bienfait Table of Content Introduction..................................................................................................................................... 2 Enterprise Valuation ....................................................................................................................... 2 The Weighted Average Cost of Capital Approach ......................................................................... 2 The
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