Case 48 is an exercise in valuing a potential acquisition target using discounted cash flow approach in their analysis. Study the case, use case 42 for reference, and provide detailed discussion on the following questions:

1. Assuming stand-alone valuation of Sun Microsystems:

a. What rate of return (WACC) should Oracle require on the acquisition? Show detailed calculation of WACC.

b. What stand-alone cash flows (base-case cash flows) do you forecast? Show in Excel spreadsheet with correct cell formula.

c. What is your estimate of terminal value? Show detailed calculation of terminal value.

d. What is the enterprise value of Sun Microsystems? What is the equity value?

2. Assuming with-synergies valuation of Sun Microsystems:

a. What rate of return (WACC) should Oracle require on the acquisition? Show detailed calculation of WACC.

b. What with-synergies cash flows do you forecast? Show in Excel spreadsheet with correct cell formula.

c. What is your estimate of terminal value? Show detailed calculation of terminal value.

d. What is the enterprise value of Sun Microsystems? What is the equity value?

3. If a competing bidder appears, how high a price should Oracle be willing to offer?

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VERY, VERY IMPORTANT. PLEASE HELP