{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

case 2 questions 4 and 5_Solutions

case 2 questions 4 and 5_Solutions - make it worthwhile for...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
4. Would Intel Capital think about the valuation of this company? What are the pros and cons of investing from Intel’s perspective? Intel Capital needs to strongly consider the internal disputes in Deccanet especially on the potential demerger of the software and hardware divisions. This demerger would lower the valuation of Deccanet, however the current lack of performance and revenue in the hardware division is putting the future of the company as a whole at risk. If the demerger goes through, then Intel can invest in the hardware unit (since that is the area of interest for Intel) at a lower price while taking control of a more substantial part of the company. The loss of the software unit will present a financial burden for the present, but the IP’s and the hardware divisions potential to go global
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: make it worthwhile for Intel to invest in the company. However, if the Deccanet decides against a demerger, then Intel would have to take into the consideration the current trend of net losses in the company. The IPs again are great assets, however the lack of performance, mainly due to the separation of the two divisions, as well as a lack of customers in Europe and the US pose a dilemma for Intel. 5. What would Deccanet and existing investors GVFL and TDA gain from an Intel investment? Deccanet would be able to dilute some of its debt as well as spend more on globalization. GVFL and TDA however would be giving up some control of the company. Yet in the long run an investment by Intel could help save Deccanet from bankruptcy and the loss of GVFL and TDA capital investments....
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online