The CEO has described to you a significant new product addition to the Company. The Management team has agreed on this new course of action and has presented the new product addition to the Board. The Board has approved the initiative subject to financing. The Board has agreed with the CEO that there are two separate alternatives open to the Board: 1) The sale of the Company to a larger concern; or, 2) The issuance of additional stock. (The Board does not want to lever the Company further with additional debt.)

The purpose of the project is to write a letter to the CEO of your company and explain to him/her the following:

1. The M&A valuation of his or her company. Please use all 4 valuation methods and describe how you arrived at the value you came up with. How quickly can you sell the Company? Who are the targeted purchasers? What process will you use? What is the likelihood of success?
2. What is the current market value of the Company as determined by the stock market? What has been the recent trend for the price of the stock? What is the average number of shares traded each day? Can you do a stock offering? What would be the price?

Please see the format for the letter on the next page. Spelling and grammar count. Make sure that your sentences make sense and are in a logical sequence.

A letter that is more than 10 pages is too long.

This project will be due by 7:00 pm on December 12, 2017

Letter format

VIA OVERNIGHT MAIL

Date

Mr. or Ms. ________________________

Title

Name of Company

Address

RE: Financing Alternatives

Dear _______________ (Utilize their first name. You know this person.)

Introductory paragraph

1. It was good to speak with you on?
2. As requested we have described in the letter - describe the alternatives

Paragraphs 2-?

Describe the M&A valuation, the various valuation methods you utilized and what is your conclusion as to the value.

Next paragraph

Describe the current stock market, trend for their stock, etc. and whether you think an offering can be accomplished and at what valuation and stock price.

Summary

Describe what you believe is the best alternative and why.

Exhibits (?)

Stock chart

Daily trading volume of the stock chart