Before completing the case, please purchase and thoroughly read the HBR business valuation article: Valuation Concepts: Evaluating Opportunity. Then thoroughly read the HBR case: Mercury Athletic Wear Footwear: Valuing the Opportunity case and related exhibits, and answer the following questions as part of your Case Summary:
Consider the overall structure of the case and fully present the issues or problems associated with AGI acquiring Mercury Athletic Wear Footwear.
Utilizing the information provided, estimate the value of Mercury using a Discounted Cash Flow approach by:
I. Preparing a free cash flow model for Mercury based on Liedtke’s base case projections (Exhibits 6 & 7) and other relevant data contained within the case; and
II. Utilize a WACC rate of 11% in your valuation (do not try to recalculate this rate – simply use it.)
3. Review the projections formulated by Liedtke and evaluate whether or not they are appropriate. Include discussion regarding the assumptions contained within the projections and/or context of the case.
4. Given your discussion in question 1, your analysis of value associated with Mercury, the evaluation of the projections and assumptions by Liedtke (3. Above), do you believe Mercury is an appropriate target for AGI? Take a position and defend it.
5. Provide an overall conclusion regarding your assessment of the case, given your valuation, evaluation of the case information, and your discussion contained in the previous questions.
Each student is to submit a copy of their Case Summary (Word document) and related calculations (Excel document) into Canvas. Make sure to use the appropriate writing requirements that were identified in the Case 1 assignment, including title page, font, margins, etc. The correct file name for both files necessary for this case is: lastname – BUS 6070 – Sp22 – Case 3.
To purchase the PDF versions of both (1) the case: Mercury Athletic Wear Footwear: Valuing the Opportunity case (Case # 4050-PDF-ENG), and (2) reading: Valuation Concepts: Evaluating Opportunity (available at The Case Center https://www.thecasecentre.org/main/products/view?id=71490
Here is the document covering headings:
BUS 6070 – Case Writing Guidelines.docx Download BUS 6070 – Case Writing Guidelines.docx
** I uploaded both documents needed along with the formating details **