This case requires applying standard valuation techniques in the evaluation of an IPO offer price. Your group must provide a short PowerPoint presentation which includes the results of your analysis evaluating the suggested initial offering price set by the investment bankers of $12.50 per share. Submit your completed PowerPoint presentation and Excel workbook in the digital dropbox. Do not restate the basic case facts the presentation; just summarize your analysis and conclusions. In preparing your presentation, you should address the following issues. 1. What is the value per share of the Boston Beer Co.? A. Perform a discounted cash flow valuation. Conduct some sensitivity/scenario analysis by changing the key assumptions. To complete this, do the following analysis: 1] Forecast pro-forma unlevered income statements and balance sheets from 1996-2000 using percent of sales forecasting (assume it is the beginning of 1996). You can use the Excel worksheet Valuation Model in the posted Boston Beer Co. Excel workbook. Use the following assumptions: All items except depreciation, taxes, interest, long-term debt, and equity are a percent of sales. Depreciation is straight line over 5 years (so depreciation in 1996 is 1/5th of the beginning level of fixed assets and increases each year by 1/5th of the value of fixed assets purchased each of the following years). The tax rate is 40%, and the interest rate on cash and cash equivalents is 4%. Long-term debt is $0 and all external financing would come from new equity. 2] Calculate free cash flows for 1996-2000 using your forecasts. 3] Discount the free cash flows using a 10% discount rate1 to estimate the value of Boston Beer Companys common stock. Estimate the terminal value for the cash flows from 2001 onward using a constant growth perpetuity model: Find the value per share. 4] Consider various scenarios by varying key assumptions. Explain your assumptions, including what your estimated sales revenue growth implies about the size of the craft beer market and the share of that market that Boston Beer Co. will be able to achieve in the future. Summarize what you find in the various scenarios you examine in your presentation. B. Calculate the value per share using the two valuation multiples provided for the comparison firms in Exhibit 3, price-to-earnings (P/E) and market-to-book equity (P/B). Identify the key assumptions of this valuation technique and evaluate its usefulness. 2. Under what assumptions is the investment bankers price reasonable? Briefly explain whether or not you feel comfortable with the $12.50 price and determine if you believe they are pricing the offering using optimistic or pessimistic forecasts. Discuss any ideas that you believe would improve the analysis if you have any