Reference no: EM13836821
1. MarineCo manufactures, marks, and distributes recreational motor boats. Using discounted free cash flow, you value the company's operations at $2,500 million. The company has a 20 percent stake in a nonconsolidated subsidiary. The subsidiary is valued at S500 million. The investment is recorded on MarineCo's balance sheet as an equity investment of $50 million. MarineCo is looking to increase its ownership.
The company's marginal tax rate is 30 percent. Based on this information, what is MarineCo's enterprise value? If new management announced its plan to sell the company's stake in the subsidiary at its current value, how would that change your valuation?
2. You decide to value a steady-state company using probability-weighted scenario analysis. In Scenario 1, NOPLAT is expected to grow at 6 percent and ROTC equals 16 percent. In Scenario 2, NOPLAT is expected to grow at 2 percent and ROTC equals 8 percent Next year's NOPLAT is expected to equal $100 million and the weighted average cost of capital is 10 percent. Using the key value driver formula introduced in Chapter 2, what is the enterprise value in each scenario? If each scenario is equally likely, what is the enterprise value for the company?
1. Exhibit presents market and profit data for three companies. Using this data, compute enterprise-value-to-EBITDA and enterprise-value-to-EBITA for Companies 1 and 2. Is the net difference between Company 1 and Company 2 the same for both ratios? If not, why might this be?
2. Exhibit presents market and profit data for three companies. If Company 3 has nonoperating assets valued at $50 million, what are the
| Multiples Analysis: Market and Profit Data |
|
|
| $million |
|
|
|
|
|
|
Company 1 |
Company 2 |
Company 3 |
|
Market data |
|
|
|
|
Share price(dollars) |
25 |
16 |
30 |
|
Shares outstanding(million) |
5 |
8 |
15 |
|
|
|
|
|
|
Short-term debt |
25 |
15 |
30 |
|
Long term debt |
50 |
70 |
40 |
|
|
|
|
|
|
Operating Profit |
|
|
|
|
EBITDA |
25 |
30 |
58 |
|
EBITA |
22 |
23 |
61 |
company's appropriate enterprise-value-to-EBITDA and enterprise-value-to-EBITA multiples?
|
Exchange rates are determined by supply and demand
: Foreign exchange rates are determined by supply and demand in the global currency markets. The objective of this assignment is to provide insight into the daily workings of the exchange markets and develop a deeper appreciation for the forces that..
|
|
Calculating individual tax
: Hilton and Winona B. Taxpayer will file a joint federal income tax return. Hilton, age 55, is a hotel manager. Winona, who is 54, is a vice president of a small accessory supplier. The couple comes to you in early December seeking tax advice.
|
|
Why is cryptology important in information security
: Why is cryptology important in information security. What would be the implications of not using cryptographic technologies. Why might vendors propose proprietary encryption methods. Why is this suspect
|
|
Analyze the supermarket market industry in australia
: Students will complete a research-based analysis and evaluation of the supermarket market industry in Australia and defend the following two propositions.
|
|
Compute enterprise-value-to-ebitda
: Companys appropriate enterprise-value-to-EBITDA and enterprise-value-to-EBITA multiples - compute enterprise-value-to-EBITDA and enterprise-value-to-EBITA for Companies 1 and 2. Is the net difference between Company 1 and Company 2 the same for bot..
|
|
Capstone component one-portfolio
: For the first of two capstone components, you will develop a comprehensive, professional portfolio by creating three artifacts: financial statements and analysis, a sample audit program, and a tax memo.
|
|
Calculate required rate of return on ordinary shares bhp
: Calculate Required Rate of Return on ordinary shares - BHP Billiton Ltd. Calculate ordinary share valuation - single holding period for both the above compananies.
|
|
Read the gospel of luke carefully all the way through
: Read the Gospel of Luke carefully all the way through. Name and describe at least 15 characters. How are they represented in the Gospel? Provide an outline account of the narrative (timeline). What happens in the Gospel
|
|
Use saudi electronic university academic writing
: Read Case 2-3: Performance Management at the University of Ghana from pages 56-57 in the textbook. Answer the questions that are located at the end of the case study. Use Saudi Electronic University academic writing standards and APA style guidelines..
|