What approaches would you use to place a value on Sun Microsystems?

What approaches would you use to place a value on Sun Microsystems?
February 6, 2021 No Comments Assignment Assignment help

The assignment is to do the case study that is on the pdf attached- name of the case study is “Sun microsystems” (page 623-632 of the book). Please read carefully to the instructions, Focus more on the numbers, analyzing the financial numbers, concepts, this is a Financial case study, and not a “marketing essay” were you just write a lot. Focus on the numbers and financial concepts. Do not use outside resources, use ONLY the information from the case. The report must follow this EXACT structure: the report should contain I. A Statement of the Problems or issues, II. The Alternatives Solutions available, III. An Analysis of the Alternatives (85% of the grade, so focus hard on this part), IV. Your Final Recommendations, and V. Appendix-containing spreadsheets, and other support for your analysis and final recommendations. All reports must be in the Following Format: I. Statement of the Problem- just state the problem, no background on the company and no summary of the case needed. 5 to 8 lines II. Alternative Solutions- put in bullet points, single sentences. Ex: “The company should issue bond.” III. Analysis of the Alternatives- go more in dept about the alternative solutions IV. Final Recommendations- My recommendation is that…Ex: …the company takes 10M in bond. Determine what is going to be the best for the company. V. Appendix- Add-on items of the case. Here is where you put the numbers (forecast, formulas, calculations). These are just some question to help get a good read understanding of the case, technically you do not have to answer to these questions, it’s just to help you: 1.Is Sun Microsystems a good strategic fit for Oracle? 2.What approaches would you use to place a value on Sun Microsystems? 3.Assuming a discounted cash flow valuation: a.What rate of return should Oracle require on the acquisition? b.What base-case cash flows do you forecast? c.What is your estimate of terminal value? (when calculating terminal value for the DCF use perpetuity. Perpetuity is the best to use with a terminal growth rate that is usually in the long-term market growth rate) d.What is the enterprise value of Sun Microsystems? What is the equity value?