Company Valuation

Company Valuation Order Description 1) How does Berkshire create value? In what other ways do PE firms create value? 2) Does Carters fit with the Berkshire in" rel="nofollow">investment philosophy? Why is Investcorp sellin" rel="nofollow">ing? 3)Assume the deal closes on 12/31/01 and assume the company's 2001 plan was achieved. Build a fin" rel="nofollow">inancial model for Carters (proforma in" rel="nofollow">income statement, balance sheet and cash flow statement) - how much debt does Carters pay back in" rel="nofollow">in the five year forecast period (2002-2006) based on management's forecast? 4) Do a traditional DCF Valuation. What WACC would you use? Do a Capital Cash Flow Valuation. What WACC would you use? What assumptions if any did you have to make? (I will put a note on Capital Cash Flows on the HBS site for those who need it) 5) How realistic are the forecasts? Adjust your fin" rel="nofollow">inancial model to reflect a case you believe to be realistic. What is the termin" rel="nofollow">inal debt and termin" rel="nofollow">inal value in" rel="nofollow">in this case? 6) What should Berkshire bid? 7) If you were to adjust the management plan and assume that only a certain" rel="nofollow">in same percentage of the sales plan was achieved in" rel="nofollow">in each of the years of the forecast, what would this percentage be in" rel="nofollow">in order to still achieve a 23% return on in" rel="nofollow">investment for Berkshire if Berkshire were to pay $130MM plus the $317MM of debt? 8) How will the staple on fin" rel="nofollow">inancin" rel="nofollow">ing impact the range of bids likely to be submitted for the company? If the Term Loan provided by Goldman Sachs were to in" rel="nofollow">increase from $125MM to $160MM how might this impact Berkshire's bid for Carters