Week 5 Mini Case

Week 5 Mini Case - You have been hired as a consultant to...

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You have been hired as a consultant to Kulpa Fishing Supplies (KFS), a company that is seeking to increase its value. The company’s CEO and founder Mia Kulpa has asked you to estimate the value of two privately held companies that KFS is considering acquiring. But first, the senior management of KFS would like for you to explain how to value companies that don’t pay any dividends. You have structured your presentation around the following items. a) List the three types of assets that companies own. Assets-in-place, growth options, and nonoperating, or financial, assets. b) What are assets-in-place? How can their value be estimated? Examples of Assets-in-place are buildings, inventory and construction equipment. They are tangible assets expected to grow generating FCF. We estimate the value by discounting the PV of the expected future FCF, at the WACC. c) What are nonoperating assets? How can their value be estimated? Marketable securities and ownership of non-controlling interest in a different
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This note was uploaded on 04/06/2012 for the course FINANCE 410 taught by Professor N/a during the Spring '09 term at AIU Online.

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Week 5 Mini Case - You have been hired as a consultant to...

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