tom dot case

tom dot case - TOMdotCOM SUGGESTIONS& CHECKLIST Here is...

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Unformatted text preview: TOMdotCOM SUGGESTIONS & CHECKLIST Here is a checklist of items you need to address. There may be more items, not listed here, that you need to address. You may use this or a similar table in your report if you wish. What Did You Do? Item Source of the Information Is there sufficient cash flow information to use standard valuation methods? Is the “Perkins Approach” useful here? What assumptions do you need to make? Required Return P-E ratio Profit Margins Dilution due to options What is the CAGR that justifies the ask price for this IPO? How likely is Tom.com to achieve this CAGR? How sensitive is your answer to the underlying assumptions? All things considered, what do you think is the most likely CAGR, and what IPO price does it imply? You do need to come up with your own valuation for Tom.com This case provides an opportunity to apply non-standard valuation methods to a high-tech startup. Note that all the value-related figures are in HK$s. The so-called Perkins approach results in a CAGR. It is important to realize that this is not a forecast for the company. It is what average growth rate the company must achieve in order to justify its asking price. 1 ...
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