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The Acquisition of Consolidated Rail Corporation CASE!! Questions: Why does CSX want to buy Conrail? Analyze industry economics. Why did CXSs stock price fall at

The Acquisition of Consolidated Rail Corporation CASE!!

Questions:

  1. Why does CSX want to buy Conrail? Analyze industry economics. Why did CXSs stock price fall at announcement?

  1. How much is Conrail worth? How do you value the cost savings? Using Multiple valuation (price/earnings multiples, sales multiples, EBITDA multiples, and Market/Book multiples) and DCF valuation methods to calculate value of Conrail).

  1. Using the following information to calculate asset cost of capital:

Equity beta: Conrail 1.30, CSX- 1.35, Norfolk Southern 1.15

Debt beta: 0.1- for all the companies.

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