Use one (1) of the valuation techniques identified in Chapters 10 and 11 to calculate the value of the competitor you wish to purchase.

Valuation techniques

Assignment 4: Financing an Expansion
After  twelve (12) years, your business is wildly successful with multiple  locations throughout the region. You are now ready to think really big.  You want to purchase a huge competitor. (Note: You determine whether the  competitor is a privately or publicly held company.) To expand, you  will need additional capital from the debt or equity market, or both.    Write a five to seven (5-7) page paper in which you:

1.   Use one (1) of the valuation techniques identified in Chapters 10 and  11 to calculate the value of the competitor you wish to purchase. Note:  You will have to make assumptions; however, your assumptions need to be  rationally supported.   2.  Analyze the various financial  tools available to you to determine the tools that will be most helpful  in assessing whether your company can afford to purchase the competitor.  Support your response.

Imagine you can indeed afford to purchase the competitor; however, you will need an additional $100 million.

3.   Examine the options available to you to finance the competitor through  the debt market, recommending the best alternative as a result of your  analysis. Provide support for your recommendation.  4.   Examine the options available to you to finance the competitor through  the equity market, recommending the best alternative as a result of your  analysis. Provide support for your recommendation.  5.   Conduct a cross comparison of your debt and equity examinations to  determine where to ideally obtain the additional $100 million funding  needed to make the purchase and the approach that you would take to  securing the funds. Provide support for your recommendation.

Your assignment must follow these formatting requirements:

  • Be  typed, double spaced, using Times New Roman font (size 12), with  one-inch margins on all sides; citations and references must follow APA  or school-specific format. Check with your professor for any additional  instructions.
  • Include a cover page containing the title of the  assignment, the student’s name, the professor’s name, the course title,  and the date. The cover page and the reference page are not included in  the required assignment page length.

 

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