What are the key drivers in your model

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Case Study: American Greeting Cards

Assume your group are consultants specialized in finance and accounting.You have been hired by American Greeting Cards to advise the Board of Directors about the firm's dividend policy. In your report to the Board of Directors of American Greeting Cards, you will need to answer the following questions, using data from the case:

1) Do you think the current EBITDA multiple for American Greetings is appropriate? If not, what multiple of EBITDA do you think is justified? What is the implied share price that corresponds to that multiple?

2) Prepare a model of American Greetings cash flows for fiscal years 2012 through 2015, using the two sets of ratios in case Exhibit8. Based on the discounted cash flows associated with the forecast, what is the implied enterprise value of American Greetings and the corresponding share price?

3) What are the key drivers in your model?

4) What do you believe to be the value of American Greeting shares and what do you recommend to the Board about repurchasing the shares?Be sure to make all of your assumptions explicit.

Reference no: EM13862791

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