Questions: 1) In the broader context (not specific to Dollar General), what is KKR's investment strategy? (10 points) What are the challenges KKR will encounter to make its investment in Dollar General successful? (5 points) How could KKR add value to Dollar General? (10 points) 2) In context of the timeframe of the case, are Dollar General's shares inexpensive at $16$17 per share? Provide the rationale behind your answer. (20 points) 3) Perform an APV valuation analysis using the Financial Projections below and calculate the Enterprise Value. (20 points) Appendix 5: Recast financial projections for Dollar General Actual Projected 2007 2008 2009 2010 2011 2012 Revenues 9,169,822 9,784,200 10,762,620 11,838,882 13,022,770 14,325,047 COGS 6,801,617 7,161,631 7,877,794 8,665,573 9,532,131 10,485,344 SG&A 1,919,321 1,916,493 2,108,142 2,318,956 2,550,852 2,805,937 EBITDA 448,884 706,076 776,684 854,353 939,787 1,033,766 Depreciation 200,608 221,910 244,101 268,51 1 295,362 324,898 EBIT 248,276 484,166 532,583 585,842 644,425 708,868 Balance Sheet Items Working Capital 720,589 504,340 554,774 610,252 671,277 738,405 Total Debt 261,958 4,500,000 4,200,000 3,700,000 3,000,000 2,200,000 The NOTES from Case Appendix 5 apply 4) Value Dollar General using: a) Comparable Transaction Multiples (case Exhibit 5) (10 points) b) Comparable company Market Multiples (case Exhibit 6) (10 points) What factors explain the difference between the Multiples approaches versus the valuation result using APV? (5 points) 5) Is the price per share KKR is offering for Dollar General is a good deal for KKR? (10 points) Explain why