Investment Banking Assignment

Assignment Task

Comparable Companies

For CCA you should use at least 6 comparable companies. You should also choose a variety of multiples (at least two) calculated on different time horizons (LTM and forward multiples). You should divide your comps in two groups. The first group should be based on financial similarity (similarly to what we have seen in class) and the second group more focused on firms with very similar business model (in this second group you are willing to accept firms with different growth, profitability, size etc. if they have a very similar business model).

Please notice that:

• While group 1 is based on financial similarity, firms should still be in the same industry/sector.
• There is no limit on the size of the groups.

One group could be made by a single comp, as long as the total number of comps is at least 6. In the Benchmarking worksheet. You should report relevant business and financial information on your comps. From this table the reader should understand that your comparables are similar enough to your target to provide useful valuation insight. In the Valuation worksheet you need to estimate the valuation range of the company based on each of the multiples you have chosen.

2. Discounted Cash

Flows For DCF you should provide three scenarios

• A Baseline or normal scenario.
• AnOptimistic scenario.
• A Pessimistic scenario.

The optimistic and pessimistic scenario should capture the idea of a particularly good/bad period for the company, but not exceptionally so. For example, the pessimistic scenario should capture the idea of “few tough years” and not a major crisis. The two alternative scenarios (optimistic and pessimistic) should affect multiple assumptions (at least 3), and not only the sales growth.

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