1 AssumingTottenhamHotspurscontinue in their current stadium following their current player strategy Perform a DCF analysis using the cash flow projections given in the case Based on this DCF analysis, what is the value of theHotspurs Perform a multiple analysis Based on the multiples analysis, is the value ofTottenhamany different At its current stock price of13 80, isTottenhamfairly valued 2 Using a DCF approach, evaluate each of the following decisions Build the new stadium Sign a new striker Build the new stadium and sign a new striker 3 Based on the results from 2, select a best choice and provide a logical argument to support it Hints There are multiple ways to find the answer individual's answers may vary Be sure to provide a logical reasoning for your assumptions Exhibit 5 provides values for Discounted Cash Flows DCF can be done a couple ways, based on EBITDA or calculating Free Cash Flows If you use the Free Cash Flow Method, you will also need to include capital acquisitions by year and change the net working capital by year Regardless of method, you need to determine a terminal value of the business (the present value of a perpetuity) Use 10 25 as the discount rate Remember to determine the value you will need to subtract the value for debt For adding a new stadium and new striker, you need to adjust your original DCF model and find the new cash flows Remember to adjust for related revenues and expenses and recalculate the value of the enterprise Assume the Weighted Average Cost of Capital (WACC) is 10 25 Assets Current assets Cash and equivalents 26 29 Investments, available for sale 0 63 Inventory Merchandise 1 17 Accounts Receivable 19 99 Total current assets 48 07 Property and equipment, net 55 78 Intangible assets, net 49 35 Total assets 153 20 Liabilities and Stockholder Equity Current liabilities Accounts payable 64 40 Total current liabilities 64 40 Long term debt and deferred interest, net of current portion 43 08 Total liabilities 107 48 Total stockholders'(deficit) equity 45 73 Total liabilities and stockholders'equity 153 20 Shares Outstanding (millions of shares) 9 29 Market Capitalization 128 20

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1. AssumingTottenhamHotspurscontinue in their current stadium following their current player strategy:

Perform a DCF analysis using the cash flow projections given in the case. Based on this DCF analysis, what is the value of theHotspurs?
Perform a multiple analysis. Based on the multiples analysis, is the value ofTottenhamany different?
At its current stock price of13.80, isTottenhamfairly valued?

2. Using a DCF approach, evaluate each of the following decisions:

3. Based on the results from 2, select a best choice and provide a logical argument to support it.

Hints:

There are multiple ways to find the answer; individual's answers may vary. Be sure to provide a logical reasoning for your assumptions.
Exhibit 5 provides values for Discounted Cash Flows
DCF can be done a couple ways, based on EBITDA or calculating Free Cash Flows
If you use the Free Cash Flow Method, you will also need to include capital acquisitions by year and change the net working capital by year
Regardless of method, you need to determine a terminal value of the business (the present value of a perpetuity)
Use 10.25% as the discount rate
Remember to determine the value you will need to subtract the value for debt
For adding a new stadium and new striker, you need to adjust your original DCF model and find the new cash flows. Remember to adjust for related revenues and expenses and recalculate the value of the enterprise.
Assume the Weighted Average Cost of Capital (WACC) is 10.25%