Defendant-appellee The Kroger Company (Kroger) operates more than 1,400 supermarkets throughout the United States. In 1983, Kroger operated 32 supermarkets in the Indianapolis area, which together accounted for about 28 percent of area retail grocery sales. Defendant-appellee Super Valu Stores, Inc. (Super Valu), like Kroger, is a multibillion-dollar corporation. Although primarily a grocery wholesaler, Super Valu since 1980 has owned and franchised "Cub" retail food stores in various states. Cub stores are substantially larger than conventional supermarkets such as those operated by Indiana Grocery and Kroger, and offer a lower level of services to their customers in exchange for prices that normally are 6 to 10 percent lower than those of conventional stores. In late 1982, Super Valu decided to grant a Cub franchise to defendant-appellee Markkay of Indiana, Inc. (Markkay) to operate in the Indianapolis area beginning in late 1983. Thus began the entry of Super Valu and Cub into the Indianapolis retail grocery market and the events that spawned this litigation.

additional questions

1. How could we project exchange rates in order to be able to forecast exchange

differences?

2. Is it possible to use a constant WACC in the valuation of a company with a changing

debt?23

3. Which method should we use to valuate young companies with high growth but

uncertain futures? Two examples were Boston Chicken and Telepizza when they began.

4. Which of these two methods is better: discounting the Equity Cash Flow or

discounting the Free Cash Flow?

IESE Business School-University of Navarra - 3

5. Is it possible to value companies by calculating the present value of the EVA

(Economic Value Added)? Which are the necessary hypotheses so that such valuations

provide similar results to discounting cash flows?

6. What is the significance and the utility of the following formula: Ke = DIV(1+g)/P + g?

7. What is the market risk premium in Spain at the present moment - the number which

I have to use in the valuations?

8. Is the difference between the market value of the shares (capitalization) and their book

value a good measure for the value creation in a company since its foundation?33

9. Is it better to buy shares of a company or its assets?

10. Does the expected value of the sales and of the net income of Spanish companies have

anything to do with sustainable growth?