Determining the stock undervalued


You are the head of Investment Banking for Goldman Sachs. Comcast comes to you because they want to buy the Disney Corporation today, feeling the stock is undervalued, and want to buy it today, and sell it in 5 years.

a. You need to buy 10 Million shares to be majority share holder

b. The Stock is currently selling for $38 per share

c. The discount rate is 5%

d. The cash flows for the next 5 years are stated below.

e. What should your maximum offering price be?

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Finance Basics: Determining the stock undervalued
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