Usually a discount of 10 percent to 40 percent is applied to private companies due to the lack of liquidity of their shares. Precedents/acquisition comps: At what metrics (same as above) were similar companies acquired? Discounted cash flow (“DCF”): Based on the concept that value of the company equals the cash flows the company can produce in the future. An appropriate discount rate is used to calculate a net present value of projected cash flows. Leveraged Buyout (“LBO”): Assuming an IRR (usually 20 percent to 30 percent), what would a financial buyer be willing to pay?
5. How would you answer to the previous question change if Dell also repurchased $500 million of common stock in 1997, and repaid is long-term debt? (this is, in fact, what the company did) จากกรณีศึกษา Dell's Working Capital นั้น สามารถสรุปนโยบายการดำเนินธุรกิจของ Dell ดังนี้ Dell มีการพัฒนาระบบการคาดการณ์ยอดขายที่มีความแม่นยำทำให้ Dell สามารถวางแผนและจัดตารางการผลิต ตลอดจนบริหารสินค้าคงคลังได้อย่างมีประสิทธิภาพ และ supplier ส่วนใหญ่ก็ตั้งอยู่ใกล้กับโรงงานของ Dell ทำให้สามารถจัดส่งสินค้าได้อย่างต่อเนื่อง ซึ่ง Dell มีงานระหว่างทำ (WIP) และสินค้าสำเร็จรูป 10 – 20 % ส่วนคู่แข่งมีงานระหว่างทำ (WIP) และสินค้าสำเร็จรูปสูงถึง 80% ทำให้เมื่อมีการเปลี่ยนแปลงเทคโนโลยีมาเป็น Pentium models นั้น Dell สามารถผลิตสินค้าตัวใหม่ได้โดยไม่ต้องจำหน่ายสินค้าเดิมก่อน จึงทำให้ Dell ได้เปรียบคู่แข่ง เนื่องจากสามารถตอบสนองความต้องการของลูกค้าได้ก่อน และดีกว่าคู่แข่ง สำหรับนโยบายการผลิตสินค้าของ Dell คือ Build-to-order ซึ่งเป็นการผลิตสินค้าตามคำสั่งซื้อของลูกค้า โดยจะต้องได้รับคำสั่งซื้อของลูกค้าก่อน จึงจะผลิตสินค้า ดังนั้น Dell จึงไม่จำเป็นต้องมีสินค้าคงคลังมากเกินความจำเป็น นอกจากนี้สินค้าของ Dell สามารถตอบสนองความพึงพอใจของลูกค้าได้มาก โดยเห็นได้จาก Exhibit 1, Exhibit 4 และ Exhibit 5 ซึ่งอัตราการเจริญเติบโตนั้นสูงขึ้น และสูงกว่าค่าเฉลี่ยอุตสาหกรรม Q1 : How would you characterize Dell’s finance performance in
a. b. What is the minimum level of synergies for Vodafone shareholders to at least break even on the deal? Estimate the market’s assessment on December 17, 1999 about the likelihood that the deal will succeed. To do so, construct a merger arbitrage position where you buy one Mannesmann share (at the price prevailing on December 17, 1999) and sell short 53.7 Vodafone shares. Assume that the deal finalizes in 3 months time and a risk—free interest rate of 5.5%.
Once the predicted demand is frozen, L.L. Bean uses its historical demand and forecast data to analyze the forecasting errors. The forecast errors are calculated for each individual item and a frequency distribution of these is made, which is further used as a probability distribution for future errors. Thus, if 50% of the errors were within 0.7 and 1.6, the forecast for this year would be adjusted accordingly. Next, each item commitment quantity was calculated using its contribution margin and its total contribution in dollar to the revenue of the company.
They would make semiannual payments of $12.303 million and can sell the equipment at the end of its 25-year useful life at $40.185 million. If Acela’s revenue expectations are not met and Amtrak remains unprofitable, the present value of the cost of this option would be 260.26 million. Assuming profitable, the present value of the costs would become approximately $164.77 million due to the benefit of the tax shield. Also, Amtrak is considering an 80% debt to 20% equity leveraged-lease structure to finance the locomotives and train sets. They would make semiannual payments and has the option to buy the equipment from the equity investor, BNY Capital
Does this source appear on the financial statements? 1. Looking at the historical income statements, we can see that income from operations is down, interest expense is up, interest income is down income before taxes is low. If you are anticipating a business to grow, these things should be growing, rather than declining as they are on the income statements. When looking at earnings per share, we can see that between May 2003 and August 2004 they issued more shares, probably because of their expansion.
• Would need to reduce working capital by $260M • Would need to increase gross margins by 328bps • If growth is so important, then a price raise would likely slow that. The DPO change needed to self-finance is likely too aggressive. I would try to get half through DPO improvements and the other half through debt. This roughly doubles their debt. (But
How capital and labor are combined is central to how much output is produced. To increase the output with given inputs, productivity needs to increase through innovations. Innovations are often brought to the market and diffused through the economy by young entrepreneurial firms. New smaller firms often choose more risky product introduction strategies compared with more established firms. They fail more often, but they also successfully bring riskier high-impact innovations to the market more
The net present value of taking up job after MBA will increase as he will have more income for the additional number of years he works. Ans 2. Apart from the financial constraints, Ben’s decision to get an MBA can be affected by non-quantifiable factors like : a) His personality traits like risk taking attitude or risk aversion attitude. b) His confidence in getting a good job offer after finishing his degree. c) His inclination towards getting a post-graduate degree in other fields rather than business administration.
Two accounts that had been written off as uncollectible in 2005 were collected in 2006. One account for $2,108 was $1,566 was made by the Hollowell Company on another account that originally had amounted to $2,486. The controller would be paid in full because reliable reports were circulating that the trustee in bankruptcy for the Hollowell Company the dollar. 5. The Allowance for Bad Debts was adjusted to equal 3% of the balance in Accounts Receivable at the end of the yea Questions: 1.