Fin 4150 Advanced Business Valuation Assignments Overview: Assignment 1: Class Preparation/Professionalism/Participation

FIN 4150 ADVANCED BUSINESS VALUATION
ASSIGNMENTS OVERVIEW
All assignment due dates are in the class schedule in the syllabus, so short of major personal
emergencies there are no excuses, no extensions, and no exceptions. Please speak to the instructor
as early as possible about any major conflicts or schedule problems that you anticipate in order to
work something out if possible. Also, please refer to the assignment table in the syllabus for the
information about the maximum points for each assignment and whether it is a team or individual
submission.
Assignment 1: Class Preparation/Professionalism/Participation
Students often want to know how to succeed in a class or with a particular instructor. It usually comes
down to the three Ps—preparation, participation, and professionalism. Points are earned by
completing async work and case discussions, and engaging fully in live sessions.
Assignments 2–7: Case Study
Reading textbooks teaches the foundations of finance and valuation theory, and real-world
experience often demonstrates the challenges of putting those theories into practice. The lessons of
experience usually have the greatest impact because people tend to learn best by doing, not solely
by reading or hearing about other people’s experiences. Case writing is designed to provide an
opportunity to apply what you’ve learned and to learn by doing. For information on writing a case,
please refer to Ellet, W. (2018). The case study handbook a student’s guide. Boston, MA: Harvard
Business Review Press.
The case studies might be available on the web. We strongly urge you not to search for these. Using
even excellent information from the web without citing and quoting will most certainly reduce your
grade. We do not expect the use of web sources to solve the cases. You should instead rely on your
work on course content, the text, and the case to find the evidence you need to support your points.
There are four case assignments in this course.
• Ferrari: The 2015 Initial Public Offering

• Valuation of AirThread Connections
• Kohler Co. (A)
• Valuing a Cross-Border LBO: Bidding on the Yell Group
Assignment 8: Presentation
Presentation on cases gives you and your team an opportunity to synthesize what we learn in the
course and share your ideas/punchline on business valuation with the class.
FIN 4150: Advanced Business Valuation

ASSIGNMENTS
ASSIGNMENT 1: CLASS PREPARATION/ PARTICIPATION/ PROFESSIONALISM
Directions
Total Point Value: 20 points per week, 200 points total
Type of Assignment: Individual
Audience for Assignment: Colleagues and instructor
Assignment Objective: To ensure complete preparation prior to and including the live session for
the purpose of mastering the course learning objectives.
Procedure: Complete asynchronous work 24 hours prior to the live session and attend live sessions
every week, participating as described in the grading rubric.
Preparation:
This critical element is measured by completing preparation activities before the live session each
week. All asynchronous content must be viewed, and any questions, file uploads, and so on
requested during the asynchronous time must be completed. The syllabus contains weekly schedules
for readings, homework, and assignments, some of which are due before live sessions. Any
questions you have from readings, activities, and videos should be posted to the course wall so your
instructor can address them individually or in the live session.
Finance is best learned BY DOING. The intent is not to create busywork but to ensure you have
ample opportunity to apply your finance knowledge “on paper” to solidify your understanding.
Participation:
Attendance is critical to your success. Participation from each student is critical to the success of this
online course. An online course does not work unless you are an active contributor to this class. You
all have something to contribute to our success. You should be paying close attention in class as
evidenced by the video.
You are expected to be in the live sessions each week. Our class is different without you, and we lose
your perspective if you don’t attend.
Make evidence-based comments. That is, when you comment on something in class, back up your
comment with cited evidence supporting your opinion.
Missing live sessions: In line with the online MBA@Denver policy, a student can miss up to 2 live
sessions without penalty. To avoid penalty, the student must watch the live session video and submit
an e-mail with a brief summary of the live session lessons. The summary must also include anything
assigned from the async material to be presented at the live session. This must be received within 1
week of the missed live session.

Professionalism:
Students should conduct themselves so as not to disrupt the class, including but not limited to arriving
on time, not conducting side conversations (chats) with other students, not doing work for other
classes, and minimizing noise distractions to the class as a whole. Your contributions during the live
sessions are expected (see above). Your contributions should be on topic and professional in nature.
In short, conduct yourselves as if this were your place of employment and you want to remain
employed.
Grading Rubric:
Appropriate points for the week will be posted in the gradebook immediately after each live session.
Needs
Asynchronous Expected Average
Improvement
work 10 points 8 points
1 point
Fully completed 24 hours Fully completed by the Not fully completed by
prior to the live session start of the live session the start of the live
session
Contribution to Expected Average Needs
synchronous 5 points 6-8 points Improvement
class: 1 point
(1) Provides effective Presents opinion No participation;
evidence-based but no evidence for does not attend and
contributions to the opinions given; does not submit
discussion active participation summary
(2) All on-topic examples The majority of Examples are not
examples is related related to topic
to topic
(3) Solid questions that Questions asked are No questions asked
stimulate others in the generally related to topic
class to discuss
(4) Paying close attention to Most of the time paying Not looking at the
everyone in the class as attention to the class camera and paying
shown by the class video no attention
(5) Professional style of Most of the time keeping Frequently

speaking (allowing others to professional style of interrupting, talking
speak, not interrupting, speaking and participation over others.
raising a hand to speak, etc.).
Total Asynchronous 10 8 1
Points
Total Synchronous 10 6-8 1
Points
Total Points: 20 14-16 2

ASSIGNMENT 2: CASE STUDY “FERRARI: THE 2015 INITIAL PUBLIC OFFERING”
Assignment Overview: This case illustrates how to apply the relative valuation model to value a
company in two sectors: automotive and luxury goods, for IPO purpose.
Total Point Value: 100 points
Anticipated Time to Complete: 4 hours
Type of Assignment: Group
Audience for Assignment: You are presenting your analysis and proposal to the managing
director at UBS, who was leading the team to price the Ferrari’s shares in its IPO deal. Both
the investment banking team and Ferrari Chairman Sergio Marchionne would rely on your
report/analysis to make the best decisions on the IPO offering in a minimum amount of time.
Assignment Objective: This assignment relates to Course Learning Outcomes:
1.Review the institutional aspects of the equity issuance transaction/IPO.
2.Explore the costs and benefits associated with public share offerings.
3.Hone the skills in applying the relative valuation model to value a business.
4.Develop an appreciation for the considerations associated with identifying an appropriate
comparable set.
Procedure:
- Please closely follow the “Case Study General Guideline” posted on the online
campus to prepare for the case study and write the case report.
- Live session: Read the case and come prepared to discuss the case questions in
live session.
- Case report is due 72 hours after the live session. Include the answers to all the
case questions. Keep the report professional, to the point, and precise. Be clear and
concise; you may include the details as an appendix or in the Excel file. Make the
format and layout as uncluttered as you can.
- Case Questions
1. Summarize the case (What happened? Who? Why? How?) and identify key
strategic issue(s).
2. In your view, what are the pros and cons of going public?
3. What do you think is Ferrari’s worth (per share basis) in euros? Apply the relative
valuation model, using both the comparable companies and precedent
transactions, to value Ferrari.
o Identify the company’s key value driver.
o In Exhibit 6, which companies would you choose as comps in “Auto

Manufacturers” group? In “Luxury Brands” group? Explain your rationale.
o Use mean of selected comps and median of all companies in both group to
value Ferrari.
o Which year’s EBITDA would you use as Ferrari’s fundamental?
o Complete the worksheet “implied value table” of Excel file “Case
Data_Ferrari”.
4. In preparation for Ferrari’s listing on the NYSE, at what price in U.S. dollars
would you recommend that Ferrari shares be sold? Justify your
recommendation.
ASSIGNMENT 3: CASE STUDY “VALUATION OF AIRTHREAD CONNECTIONS” PART I

Assignment Overview: This case uses an M&A transaction in the telecommunication industry to
illustrate the business valuation process and financial modeling basics. The case is covered in a
sequence of three parts.
In Part I the case illustrates how to make a capital structure assumption and how to select the
appropriate absolute valuation model to value a business.
Audience for Assignment: You are presenting your analysis and proposal to Robert
Zimmerman, the senior vice president of business development for American Cable
Communications (ACC), pitching the idea of buying out AirThread Connections.
1. Review the institutional aspects of the M&A transaction.
2. Identify the key value driver(s) that support a subject company’s value.
3. Develop the understanding of various absolute valuation models—DCF, APV, and CCF.
4. Practice how to choose the appropriate absolute valuation model based on capital structure
assumptions.
Procedure:
the live session.

concise. You may include the details as an appendix or in the Excel file. Make the
- Case Questions
1. Summarize the case (What happened? Who? Why? How?) and identify key
strategic issue(s).
2. Discuss AirThread’s capital structure and make appropriate assumptions.
3. Reverse engineer the amortization table as shown in Exhibit 6. In your Excel model, show
how the monthly payment, annual interest, payment toward principal and ending balance in
the amortization table are estimated.
4. Based on the capital structure assumption, which absolute valuation model would you
choose to value AirThread? Justify your choice.
5. To apply the model of your choice, which CF/discount rate should be used in the forecasting
period? In the steady state? (No calculation required; discussion only.)
ASSIGNMENT 4: CASE STUDY “VALUATION OF AIRTHREAD CONNECTIONS” PART II
illustrate the business valuation process and financial modeling basics: The case is covered in a
In Part II the case illustrates how to apply the “unlevering and relevering” process to estimate beta
and discount rate/cost of capital.
1. Understand how the capital structure changes affect the determination of the cost of capital.
2. Know how to apply the “unlevering and relevering” process to estimate beta.

3. Know how to estimate the discount rate in the forecasting period and the discount rate in the
steady state.
Procedure:
the live session.
- Case Questions
1. Discuss AirThread’s capability to service the debt and justify the estimated credit rating of
“BBB+” (discussion only, no calculation required).
2. Apple the “unlevering beta” technique to estimate the discount rate / cost of capital for the
forecasting/projection period:
o Use the data/information as presented in Exhibit 7, select the appropriate comparables
and justify your choices.
o Make your own assumptions on the comparables’ capital structure and justify.
o Select the appropriate formula to unlever the comparables’ beta. The formula sheet is
included in the case data Excel file. All the comps had the investment grade rating.
o Calculate the average unlevered beta of selected comparables, and use it as AirThread’s
unlevered beta or asset beta.
o Estimate the unlevered cost of capital
3. Estimate the discount rate / cost of capital for the steady-state stage:
o Assume that in the steady state, AirThread would keep a target capital structure and
bring the debt ratio to be in line with industry average. Estimate industry average as the
average debt ratio of all companies in Exhibit 7.
o Use industry average debt ratio and select the appropriate formula to relever AirThread’s
beta. Apply CAPM model and estimate its cost of equity.
o Apply the WACC model to estimate the cost of capital / discount rate in the steady state.

ASSIGNMENT 5: CASE STUDY “VALUATION OF AIRTHREAD CONNECTIONS” PART III
illustrate the business valuation process and financial modeling basics: The case is covered in a
In Part III the case illustrates the financial forecasting “How to”, how to estimate free cash flows,
how to estimate values, and how to put together and present the valuation model in Excel.
1. Know how to put together the valuation time line.
2. Develop the understanding of financial metrics and financial forecasting process.
3. Develop the understanding of free cash flows and its role in valuation.
4. Know how to estimate the model inputs, including free cash flows, interest tax shields and
terminal value.
5. Hone the financial modeling skills.
6. Know how to estimate intrinsic value of a firm and finalize the valuation model.
Procedure:
the live session.
- Financial Forecasting: Please review the course content, exercises and solutions for
the “Financial Forecasting and Free Cash Flow” Module.
- Case Questions
1. Discuss and justify the revenue projections as presented in the case.

2. Forecast the financials and replicate the pro forma income statement, pro forma balance
sheet and cash for 2008–2012 as shown in the Financial Projections worksheet of the Excel
file “Case Data_AirThread” posted on Canvas.
Note: The projections / answers are provided to you, your task is to reverse engineer the
process. In your Excel model, show how each item in the pro forma financial statements is
forecasted / estimated. Please refer to the first worksheet in the “Case Data_AirThread”
Excel file for some tips to help you get started with the financial forecasting process. For
working capital items, project those items as included in Ex. 1, for those items not included,
assume that they will stay the same. Forecast PPE.
3. Estimate AirThread’s free cash flow to firm (FCFF) and interest tax shields (ITS) for each
year in the forecasting period of 2008–2012.
4. The long-term growth rate (LT g) in the steady state is estimated for you as 2.87%. Apply
the constant growth model (also called growing perpetuity model) to estimate terminal value.
Note: The investment banking team decided to use the fundamental method to estimate LT
g. The estimate process is illustrated in the case data Excel file.
5. Construct the time line:
- indicating the valuation / deal year, the forecasting period and the steady state stage;
- reporting all the cash flows for each year and terminal value.
6. Apply the APV model to sstimate AirThread’s intrinsic value of operation and enterprise
value at the deal year. The valuation that you have completed so far is a base case
analysis, which has not considered the value/benefits of synergies.
What are the potential synergies in this M&A deal, as discussed in the case?
How would you adjust the valuation model to factor in the synergies?
(Discussion only)
7. What would be your recommendation to Mr. Zimmerman?
Should American Cable acquire AirThread? Justify your recommendation.
If recommending to acquire AirThread, how would you prepare Mr. Zimmerman for
negotiation? What are the key strategic issues and valuation issues to bring to the
negotiation table?

ASSIGNMENT 6: CASE STUDY “KOHLER CO. (A)”
Assignment Overview: This case illustrates the model(s) and techniques to value a private
company, business with more complicated structure, and the application of business valuation in a
legal battle.
Audience for Assignment: You are presenting your analysis and proposal to Herbert V.
Kohler, Chair and CEO of Kohler Co, one of the largest private companies in United States.
Your valuation and report would be important for developing the best strategy in winning the
legal battle with dissenting shareholders.

1. Learn about the operation and challenges of a family business
2. Understand the challenges in valuing private companies and explore the valuation issues in
a legal context.
3. Know how to apply the portfolio approach to value companies with multiple divisions and more
complicated business structure.
4. Know how to adjust the cost of capital / discount rate for shareholder’s lack of diversification
and estimate total beta.
5. Know how to determine and apply the valuation adjustments to value private companies, i.e.,
control premium / minority discount, illiquidity (or lack of marketability) discount.
6. Explore the difference between fair value and fair market value.
7. Know how to determine valuation for different types of shareholders / investors.
8. Hone the financial modeling skills to put together the full valuation model in Excel.
Procedure:
the live session.

- Additional information and data are included in the Excel file “Case Data_Kohler” as
posted on the online campus.
- Case Questions
Introduction/Executive Summary
1. Summarize the case (What happened? Who? Why? How?) and identify key strategic issue(s).
o Who were the key players (controlling shareholder vs. minority shareholders; defendant
vs. plaintiffs) and what were their motivations or major conflicts?
o Why did Herbert Kohler decide to do the recap and buy out the minority shareholders
when he already controlled about 89% of the company?
Discount Rate / Cost of Capital

2. A portfolio approach is proposed to estimate the cost of capital, to account for different industry
types and risks of the multiple divisions. The following table presents the portfolio construction
and weights proposed to estimate the cost of capital.
Kohler Group/Division Portfolio Weights
Kitchen & Bath 80%
Power System 20%
o What might be the rationale for including only two divisions in the portfolio? Use the
information presented in Exhibit 4 to justify the portfolio weights.
o Use the comparables data in Exhibit 7a, Determine which comparables belong to the
“Kitchen & Bath” group and which belong to the “Power System” group.
3. Calculate Kohler’s total beta and cost of undiversified equity.
o Use the data in Exhibit 7b (in particular footnote a) to estimate Kohler’s total beta.
o Use total beta to estimate the cost of undiversified equity. Market risk premium is 5%.
4. Estimate Kohler’s target debt ratio / target capital structure and cost of debt.
o The assumption is that Kohler keeps a target capital structure in line with the industry
average. Use the latest three years’ data and calculate average debt ratio (D/V) of
comparables in each group (KB vs. PS) and calculate D/V of the 80-20 portfolio.
o Use the financials in Exhibit 3a–c and Exhibit 6a–c to estimate the cost of debt as the
average interest rate over the historical and project period of 1995–2002.

5. Use the cost of undiversified equity as estimated in Q3, target debt ratio as estimated in Q4,
and apply the WACC formula to estimate undiversified cost of capital.
Note: The final estimate of cost of capital or the discount rate = 10%, which is estimated for you.
Please use this discount rate to estimate the value.
The final estimate of discount rate is calculated as the average of the “conventional” cost of capital and
the cost of undiversified capital as estimated in Question 3.
The “conventional” cost of capital assumes that the investors are well diversified and hence the cost of
equity is estimated based on equity (or market) beta, which factors in the systematic risk only. The
cost of undiversified capital is intended for undiversified or under-diversified investors and the cost of
equity is estimated based on total beta, attempting to capture total risk. The average of the two
accounts for the fact that the minority shareholders of Kohler include both the institutional investor who
hold well-diversified portfolio and a small group of family members who hold undiversified portfolio.
DCF WACC Model
6. The investment banking team decided to use the DCF model to value Kohler.
Discuss why DCF model might be a good model choice.
7. Use the projections in Exhibit 6a, b, and c to estimate FCFFs from 1998 to 2002.
8. Apply the midyear discount / convention
o Calculate present value of FCFFs as of midyear, or the midpoint of a valuation year, i.e.
June would be the midpoint for a calendar year ending in December.
o You may review “Module 6 Financial Modeling” exercise & solutions for the midyear
discount process.
Note: The standard application of the DCF model assumes that the entire value of cash
flow for a given year comes in at the very end of that year, and discount the CF
accordingly. However, a firm runs the operation the whole year and its CFs are generated
over the full time period. The value might be underestimated with the end-of-year
discounting. To address this potential problem, an alternative method is to discount the CFs
as of the midyear.
9. Use normalized financials in 2002 to estimate terminal value. Calculate the present value of
terminal value using midyear discount. Long-term growth rate is 3%.
Note: A practice in valuation is to normalize the last year of projected free cash flow in the
forecasting period, and then use normalized free cash flow to calculate terminal value via
the constant growth model (or growing perpetuity model). And a common normalization
adjustment is to set depreciation & amortization equal to a certain % of capital expenditure.
In this case study, the 2002 cash flow is normalized by assuming that depreciation equals
capital expenditure.
10. Apply the DCF model and Estimate Kohler’s enterprise value, intrinsic value of equity, and
intrinsic price per share.

Valuation Adjustments
11. What is the difference between fair market value (FMV) and fair value (FV)?
In this lawsuit, which value would the controlling shareholders, Herbert Kohler and majority of
Kohler family, advocate for? Which value would the dissenting minority shareholders,
including a small group of Kohler family members and outside shareholders, argue for?
12. Estimate fair market value per share and fair value per share.
o Start with the intrinsic value of equity based on DCF model (your answer to Question 10).
o Determine what is the valuation basis for DCF model.
o Determine whether to make adjustments and what are the appropriate valuation
adjustments required to estimate fair market value per share and fair value per share.
o Based on the Mergerstat database, the control premium = 30%

and the illiquidity discount or lack of marketability discount (DLOM) = 40%.
Conclude/Recommendation
13. Is your estimate consistent with Herbert Kohler’s offer to dissenting shareholders? If not, what
might cause the discrepancy?
14. What would be your recommendation to Herbert Kohler? Settle or go to trial? If to settle with
the dissenting shareholders, what is the maximum settling share price that you would
recommend?
ASSIGNMENT 7: CASE STUDY “VALUING A CROSS-BORDER LBO BIDDING ON THE YELL GROUP”
Assignment Overview: This case illustrates how to value a cross-border transaction and how to
value a stable cash-cow business along with a growth business. It also showcases the economics of
an LBO deal and the role of private equity investors.
Audience for Assignment: You are presenting your analysis and proposal to the team in
private equity firms Apax Partners and Hicks, Muse, Tate & Furst to facilitate the Yell LBO
deal. Your report would be important for the PE firms to make the best decisions and ensure
the success of the deal.

1. Learn the private equity deal structure and process.
2. Understand the basics of international finance.
3. Know how to value a business in the cross-border setting, a business in a different country
with cash flows in different currency.
4. Know how to estimate the cost of capital / discount rate for cross-border deal.
5. Know how to apply the decentralized or centralized approach to value cross-border
business.
6. Know how to apply the CCF model.
7. Identify the distinctive features of highly leveraged transactions and how to value such
transactions.
8. Understand the “sum of part” method.
Procedure:
the live session.
- Additional information and data are included in the Excel file “Case Data_Yell” as
posted on the online campus.
- Case Questions
Introduction/Summary
1. Summarize the (What happened? Who? Why? How?) and identify key strategic issue(s).
o What are the opportunities and uncertainties in the Yell deal? For buyer? For seller?
o Discuss industry characteristics (i.e., cash flow predictability, capital requirements).
o What are the differences between Yell’s two directory businesses?
o Is it an advantage or a disadvantage for the proposed deal?
o Which one has better debt servicing potential?
Value UK-BT Yellow Pages

Financing Structure
2. Use the information in Exhibit 8 to replicate the tables in the worksheet “Debt Schedule” of the
Excel file
“Case Data -Yell”. Reverse engineer and show how the debt schedule is projected.

o Use the principal amount in the “Amount” column and repayment schedule as shown in
the “Type” column and footnotes to estimate the ending balance of each type of debt for
each year during the projection period.
o Senior Term Loan - Bullet: The principal will be paid as a lump sum at the end of
maturity.
o Vendor Loan: As PIK (or payment in kind) debt, interest accrued and rolled over to the
debt balance each period; i.e., ending debt balance of vendor loan in year 2002
= beginning balance + beginning balance x Libor rate
o The accrued interest of vendor loan should be included in the total interest expenses.
Note: “Successful” financing is critical for an LBO deal. It is important to build the full debt
schedule and have a good understanding of the deal’s financing structure as well as the
impact on cost of capital and CFs.
Financial Projection / Forecast Cash Flow

3. The valuation team in the private equity firm put together the financial projections of BT Yellow
Pages as
4. presented in the “CCF-UK Business” worksheet of the Excel file “Case Data -Yell”.
o Compare to management projections in Exhibit 6, identify the differences and
justify the modification.
o Estimate the FCFF, ITS, and CCF and complete the CCF table
Note: that all the debt/borrowings were financed through UK Business and hence reported in
the BT Yellow Pages’ financial statements.
Discount Rate
5. The PE’s analysis of comparable companies is presented in the COMPs worksheet.
o Justify PE’s selection of comps.
o The PE team decided to take the “integrated market” approach and estimated the
comparables’ beta using the world market portfolio. Do you agree with PE’s approach?
Justify the “integrated market” assumption.
o Estimate the unlevered beta of WorldPages and fill in the blank cell in the unlevered
beta WN column, assuming that the comparables do not keep a target capital structure.
o Estimate BT’s unlevered beta as the average of comparables’ unlevered beta WN.
o Estimate the unlevered cost of capital of BT Yellow Pages, assuming that market risk
premium is 7% and using the yield of long-term UK government bond as Rf.
Capital Cash Flow (CCF) Model

6. The private equity team decided to apply the CCF model to value the LBO deal. Justify why
CCF model might be a good choice.
7. Apply CCF model to estimate the enterprise value of BT Yellow Pages in 2001.
o Assume that CCF will grow at the long-term growth rate in the steady state; apply the
constant growth model (also called growing perpetuity model) to estimate terminal

value.
o Use the unlevered cost of capital as the discount rate to reflect the riskiness of CCF.
o Estimate the intrinsic enterprise value and intrinsic value of equity in 2001.
Value Yellow Book USA

8. The private equity firm’s projections of Yellow Book USA are presented in the CCF-US
Business worksheet. Explain how to forecast or estimate the organic revenue, organic EBITDA,
and total EBITDA. (Discussion only, no calculation required.)
9. Assuming that Yellow Book USA planned to borrow new debt in the amount of $600mm (up to
4x EBITDA) at the interest rate of 10% in 2007, to finance the ongoing operation in the steady
state and keep a target capital structure, estimate interest tax shields and CCF in 2007.
10. Use the “grossing-up” method to estimate the unlevered cost of capital of Yellow Book USA.
11. There are two approaches to value a foreign business – decentralized approach and
centralized approach. Which approach is appropriate to value Yellow Book USA? Justify your
selection.
12. Estimate the intrinsic enterprise value of Yellow Book USA in home currency.
o Make appropriate assumption on the long-term growth rate in the steady state.
o Apply CCF model.
o Apply the valuation approach of your choice (your answer to Question 11).
o Use the spot rate to convert the intrinsic value in US$ into home currency value.
“Sum of Part” Approach

13. Estimate the intrinsic value of Yell.
o Estimate the value of BT Yellow Pages and Yellow Book USA separately, and then sum
up to calculate the total value.
Conclusion/Recommendation
14. If you were leading the Apax/Hicks Muse team, what would be your recommendation?
o Would you recommend to do the deal?
o Identify the key factors to make it a good LBO deal.
o What much would you recommend to bid?
o Justify your recommendation.

CASE REPORT GRADING RUBRIC
This grading rubric is used to evaluate the case reports for Assignments 2–7.
Expected Average Needs Improvement
Problem or Objective Key issues are clearly Key points are Key points are not
stated, explained, and stated but not fully clear. Question not
well supported. supported. adequately
(20%) (12-14%) answered.
(1%)
Financial Analysis Analysis is strong, Analysis is solid Analysis is partial
comprehensive and but incomplete. or incomplete.
thorough. Incorporates Provides some Does not provide
pertinent and detailed necessary necessary
information and provides evidence but less evidence, or does
needed evidence or thoroughly and/or so minimally and/or
justification. relevantly. irrelevantly.
(35%) (20-28%) (2%)
Financial Modeling The financial models are Minor inconsistencies There are significant
well built and consistent. in the financial models. problems and
All the information is Presents information inconsistencies with
presented clearly and fairly clearly and financial models.
concisely in an organized concisely, has minor Lacks any
manner in Excel; focused organization problems. recognizable
and easy to follow. (20-25%) organization; difficult
(30%) to follow.
(1.25%)
Writing Style Document is written with Document is written Document is not
Clear and direct excellent attention to with some attention to well written.
Concise detail; extremely clear detail, can be more Confusing, difficult
Correct and direct, concise, clear and concise, is to follow and has
Logically ordered correct, logically ordered. not well structured; no structure.
Displays minimal has some grammar
grammar/spelling/etc. and/or spelling errors. (0.5%)
problems.
(10%) (6-8%)
Appendices/Charts/ Referenced in body of Some are not Generally, not

Reference/ paper, exhibits add referenced in paper, referenced in the
Supporting Documents substantial value, insight, exhibits add some paper, add little
and interpretation to value, insight, and value to support the
support the argument; interpretation to argument, and are
are exceptionally easy to support the argument; difficult to
understand quickly. somewhat difficult to understand.
(5%) understand. (0.25%)
(3-4%)
Total Points 100% of total points 60-80% of total points 5% of total points
assigned to the case assigned to the case assigned to the case

ASSIGNMENT 8: PRESENTATION
Assignment Overview:
Each group will make a presentation on one of the cases covered in the class.

Anticipated Time to Complete: 1 hour
Audience for Assignment: Instructor and your fellow students. It will be a great opportunity
to share your thoughts about the case and your perspectives about business valuation.
1. Demonstrate the understanding and knowledge of business valuation.
2. Hone the presentation and communication skills required for professional finance careers.
Procedure:
Each group has up to 30 minutes to present and lead the discussion.
- The presentation should cover the following:
o Executive summary
o Introduction: What happened? Who? Why? How?
o Strategic issues
o Valuation Modeling
(which valuation model? Assumptions? Key model components? Process? Results?)
o Conclusion & Recommendation
- Please prepare PPT slides and each team member should play a role in the presentation.
- The substance and quality of your analysis and recommendation in an oral presentation
should be no different than in the case write-up.
- Try to avoid the use of “We believe,” “We think,” “We feel” in the presentation; try the
following: “Our analysis shows,” “the company should…because.…”
- Try to avoid reciting information; all your classmates have read the case and are familiar
with the situation. Instead, use the data and information to explain your assessment and to
support your recommendation.
- Be ready to answer questions.
- Suggested Presentation Structure
1 title slide
1 table of contents or outline slide to present the roadmap of your presentation
1-2 slides showing the key problems and strategic issues
A series of slides covering the assumptions, analysis, and results
A series of slides containing your recommendations, supporting arguments and reasoning
1 conclusion slide summing up everything

PRESENTATION GRADING RUBRIC
Expected Average Needs

Improvements
Content Demonstrate full Know the content. Don’t have grasp of

knowledge. the information.
(28-35%)
(40%) (4%)
Organization Information is presented There is a structure No sequence of

in a logical, interesting but may have some information, hard to
sequence for the inconsistencies and follow and
audience to follow. sequencing understand.
problems.
(25%) (3%)
(15-20%)
Pace/Communication Clear, conversational, Delivery is mostly Cannot address

and good pace. Can clear and natural; basic questions.
address questions with appropriate pace.
(2%)
relevant, correct Can address most
information. questions.
(25%) (15-20%)
Quality of Slides Professional, high- Readable, Unprofessional,

quality, and powerful appropriate level of confusing
images to deliver detail that inappropriate level of
idea/information. emphasizes main detail.
points.
(10%) (1%)
(2-5%)
Total points 100% of total points 60-80% of total points 10% of total points

ASSIGNMENT 9: COURSE REFLECTION SHEET
Assignment Overview:
Each student will write a self-reflection piece about your learning experience in this
course.

Anticipated Time to Complete: 1 hour
Audience for Assignment: Instructor and you yourself. It will be a great opportunity for
you to digest, examine and interpret this learning experience to gain new learning and
extend to your professional growth.
Assignment Objective: This assignment relates to Course Learning outcomes:
3. Demonstrate the understanding and knowledge of business valuation.
4. Hone the presentation and communication skills required for professional
finance careers.
Procedure:
- Suggested questions to be addressed in the reflection sheet:
o What did you learn?
What are your thinking/learning of the course and business valuation?
What went well or not well?
o What sense can you make of the course material?
Analyze the course content and showcase your understanding of the
topics covered in the course;
o What connections can you make with your past learning experience, your
life experience and/or your future goal?
o What is your conclusion & what are the long-term implications
- Page limit: 1 page
- Suggested formatting: 12pt font size | single spaced | Times New Roman font
REFLECTION SHEET GRADING RUBRIC

Improvements
Reflective Thinking Clearly demonstrate the The explaination of Does’t address the
student’s own thinking and the student’s own student’s thinking
learning processes; thinking or learning is and/or learning.
vague and/or unclear.
(40%) (4%)
(28-35%)

REFLECTION SHEET GRADING RUBRIC CONT’D
Improvements
Analysis Provide thoughtful analysis Attempt to analyze No analysis or

of the topics / material the course material, synopsis of the
covered in this course and however, the analysis course material
demonstrate solid is obscure and does
(4%)
understanding of the not demonstrate a
material good understanding
(30%) (16-22%)
Making Connections Articulate the connections Attempt to make the No connections to

between this learning connections, however other learnings,
experience with past the presentation is previous experiences
learning, life experiences vague and/or unclear. or future goals.
and/or future goals.
(15-20%) (2%)
(25%)
Writing Professional; clear, Readable; Unprofessional;

concise and logically not clear and not well confusing, difficult to
structured; demonstrate structured; has some follow and has no
minimal grammar and grammar and spelling structure; many
spelling problems. errors. grammar and
spelling errors.
(5%) (1-3%)
(0%)
Total points 100% of total points 60-80% of total points 10% of total points

Fin 4150 Advanced Business Valuation Assignments Overview: Assignment 1: Class Preparation/Professionalism/Participation

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FIN 4150 ADVANCED BUSINESS VALUATION

Assignment 1: Class Preparation/Professionalism/Participation

Assignments 2–7: Case Study

There are four case assignments in this course.

• Ferrari: The 2015 Initial Public Offering

FIN 4150: Advanced Business Valuation

FIN 4150: Advanced Business Valuation

(5) Professional style of Most of the time keeping Frequently

FIN 4150: Advanced Business Valuation

FIN 4150: Advanced Business Valuation

ASSIGNMENT 3: CASE STUDY “VALUATION OF AIRTHREAD CONNECTIONS” PART I

FIN 4150: Advanced Business Valuation

ASSIGNMENT 4: CASE STUDY “VALUATION OF AIRTHREAD CONNECTIONS” PART II

FIN 4150: Advanced Business Valuation

FIN 4150: Advanced Business Valuation

FIN 4150: Advanced Business Valuation

FIN 4150: Advanced Business Valuation

Assignment Objective: This assignment relates to Course Learning Outcomes:

FIN 4150: Advanced Business Valuation

Discount Rate / Cost of Capital

FIN 4150: Advanced Business Valuation

FIN 4150: Advanced Business Valuation

o Based on the Mergerstat database, the control premium = 30%

FIN 4150: Advanced Business Valuation

Value UK-BT Yellow Pages

FIN 4150: Advanced Business Valuation

Financial Projection / Forecast Cash Flow

Capital Cash Flow (CCF) Model

FIN 4150: Advanced Business Valuation

Value Yellow Book USA

“Sum of Part” Approach

FIN 4150: Advanced Business Valuation

Appendices/Charts/ Referenced in body of Some are not Generally, not

FIN 4150: Advanced Business Valuation

Total Point Value: 50 points

FIN 4150: Advanced Business Valuation

Expected Average Needs

Content Demonstrate full Know the content. Don’t have grasp of

Organization Information is presented There is a structure No sequence of

Pace/Communication Clear, conversational, Delivery is mostly Cannot address

Quality of Slides Professional, high- Readable, Unprofessional,

FIN 4150: Advanced Business Valuation

Total Point Value: 50 points

REFLECTION SHEET GRADING RUBRIC

FIN 4150: Advanced Business Valuation

Analysis Provide thoughtful analysis Attempt to analyze No analysis or

Making Connections Articulate the connections Attempt to make the No connections to

Writing Professional; clear, Readable; Unprofessional;

FIN 4150: Advanced Business Valuation

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