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    Task 4 - Template - Revised

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    Mathieu Kasprzak
    The valuation of Happy Hour Co has decreased following a fire at one of its plants. The present value of cash flows is now $345m, down 15% from prior estimates. The implied firm NPV is $738m, an 8% decrease, and the implied equity value is $654m, down 8.9%. The implied share price is now $329, an 8.8% decrease from prior estimates. The fire has negatively impacted the company's valuation metrics.

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    Task 4 - Template - Revised

    Uploaded by

    Mathieu Kasprzak
    148 views1 page
    The valuation of Happy Hour Co has decreased following a fire at one of its plants. The present value of cash flows is now $345m, down 15% from prior estimates. The implied firm NPV is $738m, an 8% decrease, and the implied equity value is $654m, down 8.9%. The implied share price is now $329, an 8.8% decrease from prior estimates. The fire has negatively impacted the company's valuation metrics.

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    The valuation of Happy Hour Co has decreased following a fire at one of its plants. The present value of cash flows is now $345m, down 15% from prior estimates. The implied firm NPV is $738m, an 8% decrease, and the implied equity value is $654m, down 8.9%. The implied share price is now $329, an 8.8% decrease from prior estimates. The fire has negatively impacted the company's valuation metrics.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    148 views1 page

    Task 4 - Template - Revised

    Uploaded by

    Mathieu Kasprzak
    The valuation of Happy Hour Co has decreased following a fire at one of its plants. The present value of cash flows is now $345m, down 15% from prior estimates. The implied firm NPV is $738m, an 8% decrease, and the implied equity value is $654m, down 8.9%. The implied share price is now $329, an 8.8% decrease from prior estimates. The fire has negatively impacted the company's valuation metrics.

    Copyright:

    © All Rights Reserved
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    of 1

    Provide an investment recommendation

    Email to management

    Dear board,

    After the fire that occurred in one of Happy Hour Co’s plants, here are some information you should consider about the valuation of
    the firm:
    - Present Value of Cash Flows: $345m (-15%)

    - Implied Firm NPV: $738m (-8%)

    - Implied Equity Value: $654m (-8,9%)

    - Implied Share Price: $329 (-8,8%)

    Net present value based on perpetuity growth method


    Preliminary valuation Revised valuation (post-fire)
    Value Based on 8.5% WACC & 0.5% TGR Amount ($m) % of NPV
    Present Value of Cash flows 409 50.9%
    PV of Terminal Value 394 49.1%
    Implied Firm NPV  803 100.0%
    Net debt as of Mar-20E (85)
    Implied equity value  718  
    Implied offer share price (c) 361
    % premium to current 118.8%

    Source: Company Business Plan (January 2020); Equity research; J.P. Morgan analysis

    WORLDWIDE BREWING 1

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