Question
You are asked by the Senior Management team of SOVA Endeavours to evaluate and prepare an analysis on the following 25 March 2021 offers for
You are asked by the Senior Management team of SOVA Endeavours to evaluate and prepare an analysis on the following 25 March 2021 offers for a private asset being held by SOVA. Offer A - $100 million per year for initial 4 payments, $75 million per year for next 2 payments, $50 million per year for next 2 payments and $45 million per year for remaining 2 payments. Offer B - $75 million per year for 10 payments. Offer C - $125 million per year for initial 2 payments, $100 million per year next 4 payments, $20 million per year remaining 4 payments. Provide analysis (assumptions, tables, graphs, etc.) used to calculate your valuations on each offer and explain the rationale behind your valuation methodology.
What are the biggest 'Risk Factors' underlying your valuations?
Which offer do you recommend to Senior Management to accept? Explain your recommendation rationale.
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