Finally, because most businesses required reliable high-speed internet and landline telephony service, the recent trend toward bundled services had, to a large extent, frozen ATC out of the business market. Class discussion The two cases will be discussed in class. To sum up, your case report will have to demonstrate your ability to ponder the Valuation airthread connections and cons of alternative solutions, relying on both the course material and the information provided in the case.
What decisions does Susan Collyns face? In other words, recover the value of AirThread before considering any synergy. Most of the national carriers with whom AirThread competed could provide at least two of those services. What capital structure would you recommend for CPK? The basic premise of the AirThread acquisition was threefold.
Further, she wanted to Valuation airthread connections things simple by assuming a stock purchase using the maximum amount of leverage available.
How many shares will CPK be likely to repurchase under each scenario? Finally, because most businesses required reliable high-speed internet and landline telephony service, the recent trend toward bundled services had, to a large extent, frozen ATC out of the business market.
Unlevered Cost of Capital In order to compute the unlevered cost of capital, we have first generated the asset beta of all the comparable companies as shown in exhibit 7 of the case. As a result, Jennifer believed that the investments could be valued using a market multiple approach3.
The decline in the service revenue growth rate reflected continued deterioration in the revenue per minute of airtime as well as the continued maturation of cellular telephony. Further, she wanted to keep things simple by assuming a stock purchase using the maximum amount of leverage available.
In addition, AirThread had an extensive set of roaming agreements with other carriers to provide its customers with Valuation airthread connections in areas where the company did not operate a network.
Overview of Cable Industry Dynamics The cable industry had been rapidly transforming over the last decade as a result of advances in technology, changes in regulation, and shifts in competitive dynamics.
Operating Results As a starting point, Jennifer decided to create a base case using historical operating results as a guide, and then create an upside case that considered possible synergies. So, when the class discussion takes place, politely raise your hand and you will be invited to speak.
Business Unit Level Solution - The case study may put you in a position of a marketing manager of a small brand.
He was well aware of several high profile takeovers that ended in either eventual bankruptcy or considerable loss of shareholder value, and overpaying for a target company was one of the quickest ways to achieve disaster. The material covered in the lectures should help you avoid the many wrong answers.
Consequently, she decided to employ both a growth perpetuity method and a market multiple method based on the comparable company information contained in Exhibit 7. With the rapidly increasing costs of acquiring new customers and the high penetration rates in video and high speed internet, the group surmised that the only way to achieve meaningful customer growth would be through additional acquisitions.
AirThread competed directly with anywhere from three Valuation airthread connections five major competitors in each of its markets.
Drawing a motivation chart of the key players and their priorities from the case study description. This is just a sample partial case solution. Zhang contemplated her new assignment, she decided to take a methodical step-by-step approach to the valuation by focusing on projecting the operating results, estimating the appropriate cost of capital and quantifying the potential synergies that might result from combining the two companies.
If the case being discussed is not your assigned case, you still have an interest in partic- ipating in the discussion.
The decline in the service revenue growth rate reflected continued deterioration in the revenue per minute of airtime as well as the continued maturation of cellular telephony. In turn, these forces had been driving large investments in network infrastructure that require commensurate increases in the customer base to effectively utilize the new capacity.
These competitors included all of the national wireless carriers, which had substantially greater financial, marketing, sales, distribution, and technical resources. Use multiples to estimate the value of non-operating assets: Present Value of Cash Flows Using the unlevered cost of capital of 8.
In fact, some had argued that the company needed to find a suitor before its market position became untenable. Probably the most important warning about case studies is that there are no right answers to a case, but many wrong ones.
Zhang use for unlevered free cash- ows for through ? As a result, American Cable became an aggressive acquirer. In turn, these forces had been driving large investments in network infrastructure that require commensurate increases in the customer base to effectively utilize the new capacity.
Of course Zimmerman also knew there were considerable risks whenever large investments, particularly mergers, were involved. Evaluate each detail in the case study in light of the HBR case study analysis core ideas.
Improving financial results notwithstanding, AirThread still faced some significant financial pressures. Therefore the company is looking for possible targets for acquisition and evaluating them in order to estimate likely price of the target which represents its intrinsic and extrinsic values. In other words, recover the value of AirThread before considering any synergy.
Those networks are expected to be able to deliver not only wireless telephony but also internet service with throughput similar to that which is currently offered by cable providers.Valuation of AirThread Connections Group 7 (Shaojin Ding/ Jin Wang/ Wenqi Gu/ Shijia Wu/ Tongtong Yin/ Canran Xie) Given the background of ACC and AirThread, do you think the acquisition is a good idea?
Briefly explain your answer. Yes. First, American Cable Communication (ACC) and AirThread. Valuation of AirThread Connections. Project description read the case first and then the sample, use the calculation result in the sample, answer question 2 — ” What discount rate should Ms.
However, the valuation of the company is under consideration, as to what value can be placed for AirThread as the prospective takeover target. So as to evaluate the financial considerations which may take place before or after the acquisition process.
Valuation of AirThread Connections Case Solution, Valuation of AirThread Connections Case Analysis, Valuation of AirThread Connections Case Study Solution, Valuation of AirThread Connections Case Solution This case can be utilized as a capstone valuation exercise for year one MBA students in a rudimentary finance course.
A senior partner in the business. Valuation of AirThread Connections In early DecemberRobert Zimmerman, senior vice president of business development for American Cable Communications (ACC), was in his office sifting through a number of investment. Valuation of AirThread Connections In early DecemberRobert Zimmerman, senior vice president of business development for American Cable Communications (ACC), was in his office sifting through a number of investment.Download