The corporate finance manager of PSG is considering making an offer to buy Lionel Messi. To bring Messi to Paris for four years, they need to spend $600 million to break his contract with Barecelona. The soccer club expects that they will make an additional $200 million in net cash flows every year (for the next four years) due to wins, tickets, and marketing. Nike has currently 50 million stocks and priced $40 each. Financial analysts suggest beta of 1.6. Company paid dividend of 3.5 and dividend growth is 5%. The club has 2 million bonds trading 90% of par. Their maturity is 10 years and pay coupon 5% semi annually. Assume that the risk free rate is 1%, market return is 12% and tax rate is 20% . Calculate NPV and IRR. Should PSG make an offer?

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