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FIN 592 Week 6 Team Final Assignment Updated
Submit this assignment using Excel® and show all calculations.
Use the case study provided by your instructor to perform the following calculations:
- Compute the Weighted Average Cost of Capital (WACC).
- Compute the Free Cash Flows.
- Compute total annual cash flows (FCF plus the interest cost savings).
- Compute the horizon (terminal) value.
- Compute the present value of the annual cash flows and horizon value to determine the fair value of the company.
- Compute the total acquisition premium by computing the difference between the current market value and the fair value of the company.
Beyond the financial aspects covered in the cash flow valuation method, there are a number of other nonfinancial aspects that must be considered to determine the strategic fit of a merger. Based on the information you have on Vandalay and Kramerica Technology, discuss with your team if this merger is a good strategic fit? Why or why not?
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