Perform a DCF analysis using the cash flow projections

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Reference no: EM131402223

Case Study - Tottenham Hotspur plc

Questions -

1. Assuming Tottenham Hotspurs continue in their current stadium following their current player strategy:

Perform a DCF analysis using the cash flow projections given in the case. Based on this DCF analysis, what is the value of the Hotspurs?

Perform a multiple analysis. Based on the multiples analysis, is the value of Tottenham any different?

At its current stock price of £13.80, is Tottenham fairly valued?

2. Using a DCF approach, evaluate each of the following decisions:

Build the new stadium

Sign a new striker

Build the new stadium and sign a new striker

3. Based on the results from 2, select a best choice and provide a logical argument to support it.

Attachment:- Case Study.rar

Reference no: EM131402223

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len1402223

2/21/2017 4:04:16 AM

There are multiple ways to find the answer; individual's answers may vary. Be sure to provide a logical reasoning for your assumptions. Exhibit 5 provides values for Discounted Cash Flows. DCF can be done a couple ways, based on EBITDA or calculating Free Cash Flows. If you use the Free Cash Flow Method, you will also need to include capital acquisitions by year and change the net working capital by year. Regardless of method, you need to determine a terminal value of the business (the present value of perpetuity). Use 10.25% as the discount rate. Remember to determine the value you will need to subtract the value for debt. For adding a new stadium and new striker, you need to adjust your original DCF model and find the new cash flows. Remember to adjust for related revenues and expenses and recalculate the value of the enterprise. Assume the Weighted Average Cost of Capital (WACC) is 10.25%.

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