Would a large technology company and a large conglomerate (that operates in many industries) be good comparable firms for a multiples-based valuation? Why or why not?
Answer to relevant QuestionsDescribe the relationship between conglomerate mergers and portfolio theory. What is the desired result of merging two unrelated businesses? Has the empirical evidence proven corporate diversification to be successful? A firm has four divisions—food, cookware, retail, and credit services—that generate revenues of $1.5 million, $3.8 million, $5.7 million, and $3.1 million, respectively. Compute the Herfindahl Index (HI) for the firm. ...You are the director of capital acquisitions for Crimson Software Company. One of the projects you are considering is the acquisition of Geekware, a private software company that produces software for finance professors. ...GRJ Corp. just reported $10 million in after-tax earnings and management expects to grow at 3% in perpetuity with a weighted average cost of capital of 13%: a. How would you value GRJ using a growing perpetuity formula? b. ...“A business should always be liquidated when the liquidation value exceeds the business’s value as a going concern.” Discuss why you agree or disagree with this statement.
Post your question