Refer to the case, "HP-Compaq" (the merge of HEWLETT-PACKARD and comp) , discussed in the course and answer the following questions:

You are the research associate working for Kathryn Macalester in the case. She asks you to pick a total of THREE transactions from those listed in Exhibit 5 and Exhibit 6 (in Part A: Strategy and Valuation) to perform a valuation of Compaq based on comparable transactions. Which THREE transactions would you pick and why?

Based on the three transactions, estimate the value of Compaq's equity using ONE of the multiples (ratios) listed in Exhibit 5 and Exhibit 6 (i.e. one of Equity value / sale, Equity value / EBIT, Equity value / CFs, or Equity value / Net income). Justify your choice of multiples. What are the potential dangers if your final valuation is solely based on this step?

You recall that in one of your finance classes, you came across empirical evidence on managerial hubris driving acquisitions. Briefly discuss the empirical evidence on hubris in M&A that you know. Do you think that there is a possibility of hubris playing an important role in the HP-Compaq deal? Given your assessment about hubris in this case, what recommendation would you give Kathryn Macalester regarding how she should vote on the merger? Outline your rationales.