Final valuations fin 630 short case 4 at first total

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Final Valuations
FIN 630 Short Case                                                       4 At first, total value of GE Appliances was calculated assuming that company’s revenue will grow at 3 percent per year, Mabe’s revenue will grow at little higher rate of 3.80 percent annually and no revenue growth in Synergies in 4 years as it given in the case. Total Value = GE Appliances + Interest in Mabe + Synergies $2,294 = $1,531 + $254 + $509 Secondly, the value of GE was calculated considering that there were no Terminal Value, Capital Expenditure and Net working Capital with revenue growth assumptions same as first case but in 7 years. Total Value = GE Appliances + Interest in Mabe + Synergies $3,939 = $2,475 + $445 + $1,019 Third set of calculations was performed considering Terminal Value for investment in Mabe and Synergies as well as Net working Capital for GE appliances with revenue growth assumptions same as previous case for 7 years. Total Value = GE Appliances + Interest in Mabe + Synergies $3,939 = $2,416 + $1,096 + $7,406 Outcomes of the Merger The US Ministry of Justice appealed to the court in July 2015, demanding to cancel the transaction between the companies, since it could lead to their monopoly in the market of household appliances, ultimately hitting the prices for products. In lawsuit started on November 9, 2015, plaintiffs stated that combined market share of Electrolux and GE Appliances would account 90% of the manufacturers of household equipment in U.S. After a four-week trial, Electrolux and GE surrendered and withdrew their agreement on the acquisition of GE Appliances by Electrolux[The].
FIN 630 Short Case

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