Calculating the value of the firm using Comparable transactions
Calculating the value of the firm using Comparable transactions. Rausing Cement (RC) located in Switzerland, is looking to acquire Barbados Cement, located in Barbados (BC). The
following is data is provided for BC:
Required: Calculate the value of the firm (BC) using the following four methods:
a. Comparable transactions.
b. Acquisition premium.
c. Calculate the value of the projected synergy using discounted cash flow analysis.
d. Compare the firms’ values and comment on the firms’ performance and valuation. Also use the PEG Ratio, in addition to the previously calculated valuation metrics.
Be sure to state any assumptions you make. Also make sure you motivate/support why you picked certain numbers. This is an important aspect of this problem. Use a discount rate of 12 percent. If needed, the tax rate = 25%. A separate document will be made available with format requirements of the assignment.
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