Valuation

Case Solution for Sum of the Parts Valuation: Digital Realty Trust

Complete Case details are given below :

Case Name : Sum of the Parts Valuation: Digital Realty Trust

Authors : Erik Stafford; Joel L. Heilprin

Source : HBS Brief Cases

Case ID : 914529

Discipline : Finance

Case Length : 19 pages

Solution sample availability : YES

Plagiarism : NO (100% Original work)

Description for case is given below :

Longview Investments, an investor in alternative asset classes, had recently developed a new investment thesis to take advantage of several emerging macroeconomic themes. The strategy was premised on the belief that inflation and interest rates were likely to accelerate in the future and that digital real estate was likely to offer a superior return due to developing trends in technology and IT management. Specifically, the firm noticed greater utilization of cloud-based applications and mobile devices; the increased need for ubiquitous access to digitized data, as well as the explosion in the amount of electronic data generally; and the shifting of firms away from the use of small server closets and toward larger datacenter environments. The net result was a heightened interest in REITs specializing in digital real estate. The case is meant to demonstrate the sum of the parts valuation methodology as a capstone exercise for an introductory finance class in a first-year MBA setting. It follows an investment professional as he develops a hypothesis related to Digital Realty Trust (DLR), a publicly traded REIT specializing in digital real estate.

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Case Solution for Valuation of AirThread Connections

Complete Case details are given below :

Case Name : Valuation of AirThread Connections

Authors : Erik Stafford, Joel L. Heilprin

Source : HBS Brief Cases

Case ID : 4263

Discipline : Finance

Case Length : 15 pages

Solution sample availability : YES

Plagiarism : NO (100% Original work)

Description for case is given below :

This case can be used as a capstone valuation exercise for first-year MBA students in an introductory finance course. A senior associate in the business development group at American Cable Communications, one of the largest cable companies in the U.S., must prepare a preliminary valuation for acquiring AirThread Connections, a regional cellular provider. The acquisition would give American Cable access to wireless technology and the wireless spectrum and enable the company to offer competitive service bundles including wireless, currently a hole in the company’s service offering. Students learn the basic valuation concepts including DCF (discounted cash flow) using APV (adjusted present value) and WACC (weighted average cost of capital) and they must choose the appropriate approach for situations in which the capital structure is changing or assumed to be constant. Students must consider the effect of constant debt versus the D/V (debt-to-value ratio) in estimating betas and the costs of capital. In addition, students analyze the effects of non-operating assets on valuation. As an additional assignment, instructors can require students to consider the personal tax disadvantage of debt as well as the synergies American Cable expects to achieve following the acquisition.

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Case Solution for Cloverleaf Diary, Inc. – Valuation of a Dairy Farm

Complete Case details are given below :

Case Name : Cloverleaf Diary, Inc. – Valuation of a Dairy Farm

Authors : Janelle Mann, Mossman Charles

Source : North American Case Research Association (NACRA)

Case ID : NA0230

Discipline : Entrepreneurship

Case Length : 20 pages

Solution sample availability : YES

Plagiarism : NO (100% Original work)

Description for case is given below :

John O’Callahan returned from the University of Guelph as a new graduate, engaged to be married. He excitedly told his parents that he and his fiancée would like to take over the family dairy farm after their wedding in the summer. His parents, Michael and Audrey, were happy to hear the news as they had always planned that their family farm would transition to the next generation. At the same time they were somewhat anxious since they did not expect the decision to come so soon, and had not made formal succession plans or discussed this issue with their children. Michael and Audrey wanted to ensure that the selling price and other arrangements would enable them to retire comfortably and that any purchase would consider all three of their children. John was given the task of coming up with a proposal that contained a reasonable valuation of Cloverleaf Dairy as a starting point for a family discussion. Although his parents and sisters seemed positively disposed toward the purchase, in order to proceed, the valuation had to satisfy all parties over the short and long term.

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