Exhibit 1 Business Plan Genedata December 1999 2000 000 180.00 Is 10 W banglo 10.00 0.00 100 0.00 *Genedata does not have any debt. Exhibit 2 Comparable Companies (competitors) Comp Mark Wahl 1 S 35, 3 333100 S . 1576.00 *Net debt is equal to total debt minus cash. A negative value for this item indicates the firm has more cash than debt. Other information: Risk-free rate is 3%. Market risk premium is 7.5%. Real GDP growth rate is 3%. Questions: 1. Use William A. Sahlman Four-Factor Model to assess and evaluate the potential of Genedata. Is it an attractive investment opportunity? (5) 2. Are the financial projections provided by Genedata reasonable? Evaluate the assumptions made about compound annual growth rate in sales, market share, EBIT margin, net profit margin, R&D/Sales. (5) 3. What is the value of the firm using comparable company valuation multiple approach? Which valuation multiple(s) will you use? (3) b. What is the value (range) of the firm? (5) 4. What is the value of the firm using DCF/WACC approach? What are FCFs for 2000-2005? (5) b. What is the cost of equity? (2) What is WACC? (2) What is the terminal value by the end of 2004? (3) e. What is the value of Genedata? (5) Assuming that Genedata is raising S10 million from the new round of financing, what is the pre- money valuation based on your estimate? (2) s. What kind of sensitivity analysis and scenario analysis would you like to perform? Show your work and discuss your results. (5) Exhibit 1 Business Plan Genedata December 1999 2000 000 180.00 Is 10 W banglo 10.00 0.00 100 0.00 *Genedata does not have any debt. Exhibit 2 Comparable Companies (competitors) Comp Mark Wahl 1 S 35, 3 333100 S . 1576.00 *Net debt is equal to total debt minus cash. A negative value for this item indicates the firm has more cash than debt. Other information: Risk-free rate is 3%. Market risk premium is 7.5%. Real GDP growth rate is 3%. Questions: 1. Use William A. Sahlman Four-Factor Model to assess and evaluate the potential of Genedata. Is it an attractive investment opportunity? (5) 2. Are the financial projections provided by Genedata reasonable? Evaluate the assumptions made about compound annual growth rate in sales, market share, EBIT margin, net profit margin, R&D/Sales. (5) 3. What is the value of the firm using comparable company valuation multiple approach? Which valuation multiple(s) will you use? (3) b. What is the value (range) of the firm? (5) 4. What is the value of the firm using DCF/WACC approach? What are FCFs for 2000-2005? (5) b. What is the cost of equity? (2) What is WACC? (2) What is the terminal value by the end of 2004? (3) e. What is the value of Genedata? (5) Assuming that Genedata is raising S10 million from the new round of financing, what is the pre- money valuation based on your estimate? (2) s. What kind of sensitivity analysis and scenario analysis would you like to perform? Show your work and discuss your results
