Laura Martin case study
Question 1- Laura Martin says she gets "paid to talk" - to whom is she talking?
Answer: Laura Martin is talking with investors. She would meet with many company representatives including the CEO, CFO, operating division chiefs and head of investor relations. She is in connections with these investors via telephone, fax, voice mail or email. It is approximately 900 individual per month.
Question 2- Given this crazy web of relationships, what are Martin's incentives? Can she anger the people who provide her information? What happens if she makes negative comments? Positive comments? When and how might she try to stand out from other analysts?
Answer:
Question 3- What is happening to the role Martin plays
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• In particular, the EBIDTA figure inflates the earning of the firm, as it ignores “all the bad stuff” in its abbreviation. Furthermore, it is a pro forma figure which is very vulnerable to accounting manipulation.
Question 7- Do you agree with her interpretation of the regression analysis?
Answer:
Question 8- How reasonable are Martin's forecasts for EBITDA and her assumptions about the asset intensity of the business?
Answer: EBIDTA figure inflates the earning of the firm, as it ignores “all the bad stuff” in its abbreviation. Furthermore, it is a pro forma figure which is very vulnerable to accounting manipulation. Martin’s target price was $50 and her projections for EBITDA were realized. According to her analysis Cox traded at 13.3X EBITDA, and Martin’ s target price would translate into a 20.9X.
Question 9- How plausible is Martin's terminal value multiple?
Answer:
Question 10- Why is Martin pushing real options valuation as an alternative to DCF analysis?
Answer:
Question 11- What is the analogy Martin is trying to draw with options? What is the "stealth tier"? What is the unit of analysis? What is the underlying asset price? Strike price? Volatility?
Answer: Laura Martin felt, and with reason that the EBITDA multiplier and the DCF analysis did not account for this possible revenue stream which she named “Stealth
4. Based on your analysis in (1) – (3) above, what is your overall conclusion regarding the
Question 5: Which type of variation was critical to resolving the realized revenue case study?
4. Ben believes that the appropriate analysis is to calculate the future value of each option. How would you evaluate this statement?
Analysis Questions- Please answer each of the following in at least a paragraph, using specific evidence as support.
1. What does a financial analysis of Rawlinson’s options reveal? Assume that Rawlinson has a $500,000 budget and Porsche dealers and Porsche Canada earn a margin of 15% each on its winter equipment.
Cathy Brannen was obviously very enthusiastic about the job as outlined in the morning. She asked all the right questions, responded quickly and articulately to every query posed to her, and seemed ready to accept the position even before the offer was extended. When Harvey finally got around to mentioning the salary, there was a slight change in Cathy’s eager expression. She stiffened. Since Harvey realized that salary might be a problem, he decided to offer Cathy an incentive of sorts in addition
Though Fletcher has enjoyed long-term success as a portfolio manager, he stumbles as a team manager. One example is in his relationship with Stephanie Whitney. Though he described is as a “mentor-protégé” relationship, he admits to having little time to train her. While he provided her with general career guidance, he explains that it was her own resourcefulness and initiative that allowed her to ascend from an administrative assistant position to the role of analyst. This transition, as noted by one of her colleagues, was difficult for Whitney and she struggled with establishing her identity as an aspiring portfolio manager. Because of Fletcher’s hands-off approach to managing people, Whitney’s growth was stifled under his management, which was a contributing factor to her eventual resignation.
This document describes the coursework component for BMAN23000 which counts for 20% of the final mark for the course. You are required to complete this coursework in groups. You will be randomly allocated to a coursework group of approximately 6 fellow students in the same workshop. Details of coursework groups and companies allocated to each coursework group will be available on Blackboard (in a file called Group and Company Allocation). Details of the assignment are given below. The assignment will be discussed in detail in Workshop 1 in Week 4.
Jane is educated to degree level, having studied Criminology and is currently working part-time for her father managing his client accounts for a business he runs from home. A typical
Used Lower side of EBITDA Multiples: Dillon report does not justify that why they should take lower side of multiples. Even though JP Morgan valuation proposed such low multiples, but failed to indicate how it arrived at this multiple value.
Increase in the profits above the actual budget can be attributed to 20% increase in sales in 2009. Although Jean’s profits were above the actual budget, French Division’s earnings were much lower than what it could have been, had they budgeted for the actual volume of sales that they ended up selling. We can partly attribute this decrease in earnings to the fact
1. If you were in Steve Gasper’s place, would you argue to include the cost from market testing as a cash outflow?
Estimate the effect on income of each of the options Rowe has suggested if Bradley estimates as follows: