Question
Case 43. American Greetings. this is project, the questions cannot be separated The shares of American Greetings are currently trading at an EBITDA multiple that
Case 43. American Greetings. this is project, the questions cannot be separated
The shares of American Greetings are currently trading at an EBITDA multiple that is at the bottom of its peer group. Do you think a 3.5 times multiple is appropriate for American Greetings? If not, what multiple of EBITDA do you think is justified? What is the implied share price that corresponds to that multiple?
Please model cash flows for American Greetings for fiscal years 2012 through 2015. Using a marginal tax rate of 40% and a market risk premium of 5%, what is your estimate of the appropriate discount rate for the free cash flow forecast? Based on a discounted cash flow model, what is your best estimate of the implied enterprise value of American Greetings and the corresponding share price?
What are the key drivers of value in your model?
Do you recommend repurchasing shares?
Please help me, I will upvote for complete work
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