1 / 17

Mod VI

Mod VI. Luke Friedman. Industry Definition. Comprised of companies that sell products through “non-store” channels, including catalogs, online sales, television, and radio Products and services are delivered through the mail

tayte
Download Presentation

Mod VI

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Mod VI Luke Friedman

  2. Industry Definition • Comprised of companies that sell products through “non-store” channels, including catalogs, online sales, television, and radio • Products and services are delivered through the mail • Companies in this industry typically have low amounts of inventory and commonly act as the “middle-man” in sales transactions

  3. Regression Beta

  4. Regression Analysis • Alpha • Not statistically significant • T-stat<+/-2 • Beta • Not statistically significant • T-stat<+/-2 • More risk in B&N than in general economy

  5. Regression Analysis Continued • Standard Error • .2296 • -.31<BETA<1.83 • Not a high degree of confidence • Data pulled manually not on Yahoo!

  6. Published Betas

  7. Chosen Beta 1.05

  8. Cost of equity

  9. After-Tax cost of debt • Method 1—RNFL • 3%-10% • Method 2—Bloomberg • 1.7%

  10. RNFL

  11. WACC • Computed WACC • 7.75% • Bloomberg • 5.5%

  12. WACC Computation

  13. OLD DCF

  14. NEW DCF

  15. Conclusion and Q&A • Why Adjusted • Sole Survivorwill not perpetually liquidate • Demand for hard-cover books • No sell recommendations • ???

  16. MOD VII Problem

More Related