Develop an estimate of the long-term growth rate

Assignment Help Corporate Finance
Reference no: EM131456607

Assignment

1. Please describe the methodological approach that should be used to value AirThread (should Ms. Zhang use WACC, APV, or some combination thereof). How should the cash flows be valued for 2008 through 2012? How should the terminal value or going concern be estimated? How should the nonoperating investments in equity affiliates be accounted for in the valuation? [Hint: it may be possible to use more than one technique simultaneously]

2. What discount rate should Ms. Zhang use for un-levered FCF for 2008 through 2012? Is this the same discount rate that should be used to value the terminal value? Why or why not

3. Develop an estimate of the long-term growth rate that should be used to estimate AirThread's terminal value. Using your estimate of long-term growth, what is the present value of the AirThread's going concern value?

4. What is the total value of AirThread before considering any synergies? What is the value of AirThread, assuming Ms. Zhang's estimates for synergies are accurate?

Article: Valuation of AirThread Connections by Erik Stafford and Joel L. Heilperon.

Attachment:- AIRTHREAD ACQUISITION.pdf

Reference no: EM131456607

Questions Cloud

What is your reaction to the radio stations claim : A radio station in Myrtle Beach announced that at least 90% of the hotels and motels would be full for the Memorial Day weekend.
Explain the importance of operations research : BAF - Briefly explain the importance of operations research in the following departments of an organization A) Finance Department and Research and development department
Consisting of the share and the risk-free asset : One share has a beta of 1.25 and an expected return of 14%. the expected return on your portfolio is 9% then the beta Of your portfolio is?
Explain the family and medical leave act : Explain the family and medical leave act. support your position with at least 3 reasons and utilized 4 additional academic sources from unm-gallup databases
Develop an estimate of the long-term growth rate : Develop an estimate of the long-term growth rate that should be used to estimate AirThread's terminal value. Using your estimate of long-term growth.
Present value and multiple cash flows : Investment X offers to pay you $4,700 per year for eight years, whereas Investment Y offers to pay you $6,700 per year for five years.
Which currency appreciated : A U.S. Investor wants to invest 1,000 USD (U.S. Dollar) in Hong Kong, where the interest rate is .5%. Which currency appreciated?
Supply chain consultant for a global company : As a supply chain consultant for a global company one has to be aware of the extra costs of importing goods into the US.
What is the sample proportion of respondents : During the 2004 election year, new polling results were reported daily. In an IBD/TIPP poll of 910 adults. 503 respondents reported that they were optimistic.

Reviews

Write a Review

Corporate Finance Questions & Answers

  Impact of the global economic crisis on business environment

This paper reviews the article of ‘the impact of the global economic crisis on the business environment' that is written by Roman & Sargu (2011).

  Explain the short and the long-run effects on real output

Explain the short and the long-run effects on real output, price, and unemployment

  Examine the requirements for measuring assets

Examine the needs for measuring assets at fair value in accounting standards

  Financial analysis report driven by rigorous ratio analysis

Financial analysis report driven by rigorous ratio analysis

  Calculate the value of the merged company

Calculate the value of the merged company, the gains (losses) to each group of shareholders, NPV of the deal under different payment methods. Synergy remains the same regardless of payment method.

  Stock market project

Select five companies for the purpose of tracking the stock market, preparing research on the companies, and preparing company reports.

  Write paper on financial analysis and business analysis

Write paper on financial analysis and business analysis

  Intermediate finance

Presence of the taxes increase or decrease the value of the firm

  Average price-earnings ratio

What is the value per share of the company's stock

  Determine the financial consequences

Show by calculation the net present value for the three alternatives (no education, network design certification, mba). Also, according to NPV suggest which alternative you advise your friend to choose

  Prepare a spread sheet model

Prepare a spread sheet model for the client that determines NPV/IRR with and without tax.

  Principles and tools for financial decision-making

Principles and tools for financial decision-making. Analyse the concept of corporate capital structure and compute cost of capital.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd