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Essay about EM and Presentation Guidance Questions

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EM and Presentation Guidance Questions
BW/IP
1. Was Borg-Warner’s Industrial Products Group a good candidate for a leveraged buyout in 1987? Evaluate the price paid and the structure of the deal that closed in May 1987. Are you optimistic about BW/IP’s prospects?
2. Do you favor the proposed acquisition of UCP? What are the primary sources of value in such a transaction? Is the proposed price reasonable?
3. How do the various features of the BW/IP buyout affect the company’s decisions about long-horizon opportunities such as the UCP acquisition?
4. What are the advantages and disadvantages of the 1987 buyout, viewed as a financial program?
5. As one of BW/IP’s bankers, would you approve of the company’s request for a waiver of covenants …show more content…

Capital; expenditures decline from 45.8% of revenues in 1995 to 10.8% of revenues by 2001 (also close to Microsoft’s experience);
V. Depreciation is held constant at 5.5% of revenues;
VI. Changes in net working capital of essentially zero;
VII. Long-term steady-state growth of 4% annually after 2005; and
VIII. A long-term riskless interest rate of 6.71%
IX. Given these assumptions and starting from its current base of $16.625 million, how fast must
Netscape grow on an annual basis over the next ten years to justify a $28 share value?
6. As an executive of Netscape, what would you recommend with respect to the proposed offering price? As an investor in Netscape, what would you recommend? AS a manager of an institutional fund who is willing to buy and hold Netscape’s stock at the originally proposed price of $14 per share, would you be willing to buy and hold at an initial offer price of $28.
LinkedIn
1. What set of assumptions underlie the $9 billion market valuation of LinkedIn as of the end of July 7, 2011. What is your assessment of those assumptions? Note that, based on the first seven weeks of trading for LinkedIn’s stocks, its estimated beta is 1.5.
2. What do you think LinkedIn’s intrinsic value is? Elaborate on your valuation methods.
3. If you wanted to buy LinkedIn’s stock, would you be willing to pay more than the value you derived above?
4. What other factors may be contributing to LinkedIn’s

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