one of the largest cable operators in the U.S., prepared to acquire the AirThread. Connections (ATC), a large regional cellular provider. Although this acquisition. By early , Zimmerman was considering the possibility of acquiring AirThread Connections, one of the largest wireless companies in the United States. This case can be used as a capstone valuation exercise for first-year MBA students in an introductory finance course. A senior associate in the business.
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Hi there, would you like to get such a paper? On the other hand, there was also a well-established school of thought that believed large profitable firms with the ability to go public should not trade at a discount due to their status as private companies.
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AirThread Connections Case
First, we calculate the operating value during and using APV. Competition airthrfad the carriers was generally based on price, service area size, call quality, and customer service. The Cost of Capital for Alternative Investments. Tax ID No Most of the national carriers with whom AirThread competed could provide qirthread least two of those services.
Finance Globalization Health Care. In order to effectively attract and retain customers, the firm had to offer superior customer yo service and aggressive pricing packages in terms of monthly service fees and equipment subsidies. Gains Losses on Investments He aiethread well aware of several high profile takeovers that ended in either eventual bankruptcy or considerable loss of shareholder value, and overpaying for a target company was one of the quickest ways to achieve disaster.
Second, the acquisition could help both companies expand into the business market. About the Author Erik Stafford.
The potential synergies come from system operating cost saving as well as the increase in revenue and gross profit. Do 4 A bullet payment refers to a single payment to pay off the remaining loan balance at the time of maturity. Click here to sign up. Do 2 Total consolidated markets are markets for which the company has operating licenses comnections may not provide service.
Valuation of AirThread Connections
The decline in the service revenue growth rate reflected continued deterioration in the revenue per minute of airtime as well as the continued maturation of cellular telephony. Zimmerman had a lot on his plate. How to cite this page Choose cite format: Given the projected synergy and financing method, connectipns is the value of AirThread as a merger target?
Business ocnnections Environment Business History Entrepreneurship. We pick the risk-free rate from historical annual returns investments on T-bonds from to and use the geometric average, which is 5.
By earlyZimmerman was considering the possibility of acquiring AirThread Connections, one of the largest wireless companies in the United States. American Cable currently offered video, internet, and landline telephony, but did not have any kind of wireless offerings.
Valuation of AirThread Connection by Ivan Ng on Prezi
These competitors included all of the national wireless carriers, which had substantially greater financial, marketing, sales, distribution, and technical resources. Help Center Find new research papers in: This case can be used as a capstone valuation exercise for first-year MBA students in an introductory finance course.
We choose to change the WACC and growth rate to achieve this because we think those variables are most important. Valuation of AirThread Connections. Equity in Earnings of Affiliates Operating Results As a starting point, Jennifer decided to create a base case using historical operating results as a guide, and then create an upside case that considered possible synergies.
Finally, because most businesses required reliable high-speed internet and landline telephony service, the recent trend toward bundled services had, to a large extent, frozen ATC out of the op business market.