Assignment
JC Penny Case Task
Textbook: Case Studies in Finance- Managing for Corporate Value Creation by Robert F. Bruner, Kenneth M. Eades and Michael J. Schill, Eighth Edfition, ISBN 978-1-259-27719-1.
Primary Questions (These questions you should respond to in your presentation and case report.):
1) Value Ferrari using a market multiples approach. Provide your estimate and calculations.
2) Explain the idea of a market multiple approach? What are the strengths and weaknesses of using a market-multiples approach to valuation?
3) Based on your answer to question 2, have you chosen that right competitors when valuing Ferrari? What metrics do you think are most important when considering competitors?
4) Try a DCF approach to valuing Ferrari. For a terminal value, assume 5%. Provide your estimate.
5) Discuss whether a terminal value of 5% seems reasonable. Discuss other ways of estimating this terminal value.
6) As if you were a management consultant to Ferrari, research on your own and provide an overview of the IPO process. In addition, discuss the costs/benefits of going public. Focus on who is really to gain from the sale of the company.
7) In 2021, there are many alternatives to the traditional IPO process. For example, companies like Spotify, Planet Labs, or even NEO all when public by bucking the trends of the older system. Research at least four different ways firms can go public without going through the traditional system. Explain benefits and costs of each one.
Format your assignment according to the following formatting requirements:
(1) The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
(2) The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
(3) Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.