Session 10 - Simulation Questions.docx

CHETAN DUDDAGI 2015PGP091

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Financial Aspects of Merers an! Ac"#isitions A $rief %eport on &i'#lation( M)A in *ine Co#ntr+ 1, &tate t-e na'e of t-e co'pan+ assine! to +o# Star Shine 2, &tate t-e reser.ation prices s#/'itte! /+ +o#, Eplain t-e /asis for c-oosin t-ese reser.ation prices,

Reservation Price

&tars-ine $ 51

$el.ino $ 38

&tars-ine reser.ation price calc#lations( Con!entia" instr#ctions or Starshine% Ne& tra!e'(ro)otion ("ans or the Private Se"ection "ine &i"" *oost !o)estic reven#e *+ $3, to $35 )i""ion (er +ear An internationa" &ine an! s(irits !istri*#tor that is e-(ecte! to increase internationa" sa"es *+ $., to $.5 )i""ion (er +ear Savin/s in the )ar0etin/ #nction o $5 to $8 )i""ion Re!#ction in SG2A costs *+ a((ro-i)ate"+ $5,,,,, (er +ear •

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4ase! on the a*ove inor)ation o""o&in/ )o!ications &ere !one in the ass#)(tions% •

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Increase in o)estic Reven#es 6$M7  $ 38 6 S+ner/ies ater )er/er &ere e-(ecte! to a!! another 3 )i""ion !o)estic reven#es7 Increase in Internationa" Reven#es 6$M7  $ .3 6Mi! va"#e o the e-(ecte! increase in Internationa" sa"es has *een consi!ere!7 Re!#ction in Mar0etin/ Costs 6$M9+ear7  $ : 6Mi! va"#e o the e-(ecte! re!#ction in )ar0etin/ costs have *een consi!ere!7 Re!#ction in Other SG2A 6$M9+ear7  $ ,5 6Given va"#e7

StarShine ca(ita" str#ct#re e*t9E;#it+  .359a"#e Per(et#it+ Gro&th Rate  3@ 6Ass#)in/ in!#str+ /ro&th rate *ase! on ana"+sts ca"c#"ations7 C#rrent "evere! e;#it+ *eta  13. o >a"#e &as o*taine! ro) the avera/e o "evere! e;#it+ *eta o co)(ara*"e co)(anies

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Esti)ate! Un"evere! E;#it+ 4eta  ,8 >a"#e &as ca"c#"ate! *ase! on co)(an+ !e*t 6$ o .35)n7 an! e;#it+ va"#es 6$