Spyder Sports Case

                            Financial Valuation of Spyder diligent Sports Inc.   April 27, 2011   Analysis By: Sean Baeyens Taylor Zuccolotto Mengyu Zhu Larry Hu Mohamed Alloo                                         1.a) To grade Spyder Active Sports Inc., we decided to physical exercise the WACC method since we can easily value its cost of assets with the data immediately available to us in the case. We first unlevered the of imports of 7 comparable companies and took the median(a) to get a comparable unlevered beta for Spyder (Exhibit 1). Since we are expect Spyder is exclusively equity financed, its unlevered asset beta is equal to the beta of its assets. We now have a bowelless estimate of Spyders asset beta, we can use CAPM to suppose the cost of assets of the regular (Exhibit 2). With an appropriate give notice rate, we can use the WACC method to discount the companys projected cash flows. Again, since the company is entirely comprised of equity, the cost of assets is the cost of the entire firm, so we will use it in place of WACC. Using Spyders pro-forma income statement, we then calculate the FCFs for the next 4 years and discount those exploitation our cost of assets (Exhibit 3).

  By graphing its sales and revenues over the past 3 years, and projected for the next 3 years (Exhibit 5) we predict the increase rate of Spyder at terminal value (after 2008) to be amongst 20-30%. However the firm is in a period of bizarre and unsustainable growth and we have decided to use 2 incompatible growth scenarios, conservative (expected) and optimistic. Using Gordon Growth Model, we then plant the terminal value using growth in sempiternity and discount it back to present value. By adding these terminal set to the discounted free cash flows we calculated earlier, we get a upchuck of enterprise values, each reflecting different scenarios (Exhibit 4). b) A second rough and quick way to estimate an approximate valuation of Spyder busy sports, is to look at... If you want to get a full essay, differentiate it on our website: Orderessay

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