Question
Hello can you please help with this question. I have attached an image with the necessary date. The full question can also be found here.
Hello can you please help with this question. I have attached an image with the necessary date. The full question can also be found here.
https://www.chegg.com/homework-help/questions-and-answers/assuming-tottenham-hotspurs-continue-current-stadium-following-current-player-strategy-per-q15702497
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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