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Simulation Analysis Report On The Company

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Simulation Analysis Report As the manager of Starshine (SS) in the M&A in Wine country, the company has faced a dilemma of merge with a similar size company- Bel Vino (BV) or being acquired by the large industrial corporate- International Beverage (IB). This report valuate the deals and make judgement by evaluation. Finally, it will identify some issues related to the game. 1. Determine the reservation prices for BV and SS As a seller of SS to BV or IB, the reservation price for SS should be the minimum price for SS to accept the deal (either the cash deal offered by IB or the stock deal offered by BV). It is known that the minimum reservation prices of SS is the market price ($42.9) for cash deal ((Harvard Business Publishing, 2015). The determination of reservation price for BV needs to incorporate synergies and control benefits as a buyer. As a result, we will choose the highest reservation price using valuation methods and that is, $49.83 with the optimal synergies and WACC method. Though both differed from the average prices in the class, it is reasonable to suspect individuals neglected the cash deal option of IB and contributes to the higher reservation price for SS than my expectation. Also, for the overestimation of reservation price for BV, it is possible that single valuation methodology may trigger biases to lift up the result from its fair value. Hence, a weighted average of all valuation for the price may be more reliable and accurate. 2. Identify the

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