Evaluate the use of market multiples, Financial Management

Assignment Help:

The annual report and accounts for Astra Zeneca plc and Epistem Holdings plc and other relevant financial information are available in the ‘TMA 02 Resources folder' in the Assessment and Revision Resources section on the B831 website.
(a) Calculate the following for Astra Zeneca plc and Epistem Holdings plc:

• EV/EBITDA

• PE ratio

• price-to-cashflow

Calculate the ratios using financial information at the financial year-end (Astra Zeneca plc: 31 December 2010; Epistem Holdings plc: 30 June 2010).

(b) Using your results from (a), the sector financial information provided and any other information necessary, calculate and recommend a share value that Astra Zeneca plc might offer for Epistem Holdings plc. Assume a friendly take-over, that is, the Epistem Holdings plc board are in favour of the acquisition by Astra Zeneca plc.

Explain and justify your recommended share value.

(c) Critically evaluate the use of market multiples, in company valuation, in this scenario.

Use examples, numerical or qualitative, from Astra Zeneca plc and Epistem Holdings plc to illustrate and support your discussion.

Your discussion should consider, briefly, alternative valuation approaches.

(d) Explain how Astra Zeneca plc's choice of funding the (hypothetical) acquisition will be influenced by whether the offer to Epistem

Holdings plc shareholders is in:

• cash, or

• shares, that is, Epistem Holdings plc shareholders receive one share in Astra Zeneca plc in exchange for one share held in Epistem Holdings plc.


Related Discussions:- Evaluate the use of market multiples

Sovereign debt , Sovereign debt is a debt instrument guaranteed by th...

Sovereign debt is a debt instrument guaranteed by the government. The other names for sovereign debts are sovereign bonds or government bonds. They are issued in

Capital Asset Pricing Model , What is Capital Asset Pricing Model? Please ...

What is Capital Asset Pricing Model? Please provide me report on Capital Asset Pricing Model. It is about 2000 words count report on topic Capital Asset Pricing Model.

List the main features of ordinary shares, Question 1 Describe the types o...

Question 1 Describe the types of investment decisions Question 2 List the main features of ordinary shares Question 3 List the assumptions of Walter's dividend model. Ex

Define ‘trust''. explain in detail the various types of trust, Question 1 ...

Question 1 Define 'Trust'. Explain in detail the various types of Trust Question 2 Discuss the concept of Tax Planning. Identify difference between Tax Planning and Tax Ev

What do you mean by sarbanes-oxley, Q. What do you mean by Sarbanes-Oxley? ...

Q. What do you mean by Sarbanes-Oxley? Sarbanes-Oxley (SOX) - Sarbanes-Oxley Act was signed into law on 30 July 2002 by President Bush. Act is designed to oversee the financial

Explain about the term- contingent liabilities, Explain about the term- Con...

Explain about the term- Contingent liabilities Under IAS 37 provisions, contingent assets and contingentliabilities, contingent liabilities aren't recognised in the financia

What is meaning of perpetuity, What is meaning of Perpetuity If annuity...

What is meaning of Perpetuity If annuity is expected to go on forever then it is known as a perpetuity and then the above formula reduces to: Present value: A/i Perpetuit

Forward planning and critical path, a) Critical Path: A, B, E and F. Projec...

a) Critical Path: A, B, E and F. Project completed in 11 weeks. Subtract one mark for each error made. Maximum marks can only be awarded if the candidate explicitly indicat

Cash dividend, what is amount of cash dividend if investor buys share of 1...

what is amount of cash dividend if investor buys share of 100 at premium of 400.

Write Your Message!

Captcha
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