Spirit Airlines Executive Summary

Another option is the issuing of preferred stock, the company’s common stock is already overvalued in the market; therefore, sourcing additional capital through common stock might result to lower proceeds.

The weekly performance of the stock has a trend of constant growth with a significant growth in price compared to the IBM stock which happened in week four to six (09/30/11-10/06/16). A major factor for the large jump in the stock price is due to the shocking current news of Google acquiring Motorola Mobility for $12.5 billion. Right after the announcement of

The pricing strategy does not really differentiate it from the competitors as value-based service is not provided by the airlines. The low-cost structure and revenue strategy of Spirit Airlines give it a sustainable competitive

o Please see Exhibit 3. (b) $500 million of 12.5% 20 year subordinated debentures –

On the downside, Spirit airlines do not have a lot of leg room for their customer comfort. Yes, Spirit airlines are relatively cheap; however, for each amenity they offer which include bag carry on, beverages, and food there is a price added to the airfare price. Spirit also does not have any entertainment aboard their flights for their customers’ enjoyment. This has made customers opt with flying with Spirit.

Andrea Winfield considered issuing bonds was not a good option for financing the acquisition. She was particularly concerned about the increasing long-term debt and annual cash layout of $ 6.25 million for 15 years. We believe that her concerns are justified, because the Company had already significant amount of debt that could result in higher risks and stock price

Wahoo Inc. is a C Corporation that filed for Chapter 11 bankruptcy protection in April 2015. Before filing bankruptcy, Wahoo has net operating loss (NOL) carryforwards of $65,000,000 in 2009, $45,000,000 in 2010, and $30,000,000 in 2011. The company worked out a re-organization plan and one of the note holders (a venture capital firm that financed the company) with a $105,000,000 note payable will receive new common stock and the old stocks will be cancelled. The Bankruptcy Court and the creditors’ committee have accepted the plan. The fair market value of Wahoo before the ownership change was $85,000,000. Wahoo’s selected assets from the balance sheet are as follows:

The technology portion of their company has grown tremendously which has caused so much of their growth. In addition, they found the perfect formula to appeal to and retain customers. Most of their customers are loyal to their company and insist on sticking to their products. Their market capitalization, $639,922 million, is extremely high compared to other companies in their industry They returned about $8 billion to shareholders during their quarter. Also, their gross margins, currently at 38.01%, are high at passed by

Because of the fact that BHC is a new venture ; the risk is actually high. Mortgage rate appears to compensate for the risk.When BHC had acquired $2,275,000 with a mortgage.

The management of JetBlue and its underwriters can also price the IPO using valuation multiples. JetBlue can employ the most current comparable data of the most appropriate competitors in terms of value in the airline industry. Valuation multiples that can be employed include, but are not limited to P/E multiples, EBIT multiples, EBITDA multiples. In this scenario, I choose to use Southwest airlines and Ryanair as the major benchmarks, because they are both considered as major low –fare airlines, and are key competitors in the United States and Europe. Nevertheless, I believe the P/E ratio is the stronger valuation tool to determine the true value of a firm. Using this method we come up with a share price of $19.32 for Southwest

The company lost money almost every year since its leveraged buyout by Coniston Partners in 1989. The income generated was not sufficient to service the interest expenses of the company which stood at $2.62B in 1996. From Exhibit 1, we can say that interest coverage ratio computed as EBIT / Interest Expense was 1.31 in 1989 and has been decreasing over years and currently stands at 0.59. This raises a question of how the company can meet its interest payments without raising cash or selling assets.

Nearly There designs, develops, manufactures and sells various navigation products and services. They are a public company registered with the SEC and their common stock trades on the stock exchange. The Company is well capitalized with a $100 million market capitalization for its common stock. Due to R&D expenses and slumping sales, Nearly There is in the need of additional capital. The Company's solution was to issue 5 million shares of Series B preferred stock at $1.20 per share. The proceeds received by the company totaled $5.9 million. The important terms of the Series B preferred stock included dividends, voting rights, conversion options, conversion price adjustment,

Note 3 touches on the category of cash and cash equivalents. Some of the cash equivalents are "available for sale securities." These include agency obligations ($20 million), commercial paper ($87 million), corporate debt securities ($78 million), government treasury securities ($606 million) and certificates of deposit ($64 million). In addition, the balance sheet shows $1.1886 billion in cash. There are stated at fair market value, which if it cannot be determined on the open market is estimated. The company values auction rate securities using an internally-developed valuation model. The company also notes that some of the "available for sale" securities are longer-term in

The case is set in the context of RJR’s 1985 financing of its $4.9 billion acquisition of Nabisco Brands Inc. To finance the acquisition, RJR was proposing the issue of $1.2 billion of 12 year notes and the same amount in preferred stock. It had already funded $1.5 billion of the acquisition leaving $1 billion more to finance.

As of November 23, 2007, the company has been notified that the following persons had interests in 3% or more of their issued share capital.