Instructions for Project:
You will value a company from the perspective of an acquiring firm. The idea is that you will be consulting on behalf of the acquirer to help them decide whether or not to purchase the firm you are valuing and at what cost. Hold synergies between the hypothetical acquiring firm and the firm you are valuing constant – meaning only worry about valuing the company you are valuing and don’t include any non-cash benefits that one specific acquire may realize from the acquisition of that company.
You are to include in your report the 13 excel files from the “Valuation” section on the author’s site: (just copy and paste into a word doc for your report, as mentioned you may only need to use 2 or 3 of them depending on the assumptions you’re making for your company’s growth rate and cost of capital, etc..
1.goto http://people.stern.nyu. edu/adamodar/
2.click on “writing”
3.click on “books”
4.click on the book we’re using “Applied Corporate Finance” 3rd Edition
5.scroll down to nearly the bottom of the page and you’ll see the 13 links for the excel spreadsheet files in the “Valuation” section”
These excel files are basically cheats for you. Everything is computed all you have to do is enter numbers from your firm’s 10k’s (annual reports). If you can’t find the inputs you need from your company’s 10k, use the internet to find the answers, they are out there.
These excel files should give you everything you need to answer the questions in the case study. You may not need to use/include every spreadsheet (all 13). You may only two or three. How many you use will depend on your outlook for the company’s growth.
You will get your data and info by downloading your company’s 10k’s online for current numbers. For historical numbers you should be able to find on Yahoo Finance or Google.
The format of the report is at your choosing. Get creative. Have fun. Bear in mind this report should be as professional as possible given that you are not spending money on aesthetics. You submit the project on Blackboard.
You will include an introduction that is appropriate to set the stage for the position of the firm (it’s current value and future opportunities). You will also include in your report a “Valuation Findings and Purchase Recommendation” where you will present your calculated value of the firm, any assumptions used, and your purchase recommendation – cost, conditions/terms, etc.
PLEASE note: this assignment is worth 10% of your final grade. Please do not spend more than 4-8 hours on this project. It is a learning exercise so please approach it as an opportunity to apply your newfound valuation knowledge in finance to scrutinize a public company and it’s current value / future expected cash flows.
