Using the equity beta of Surfside Footwear results in a NPV of $22,259,000 (See Exhibit 2), which reflects the risk among similar industry peers. Mercury. The truly Mercury Athletic Footwear: Valuing the Opportunity Case Solution thing about such collection of small tasks is that if you truly feel nice and productive you can decide on a more difficult or creative job to tackle (for instance, write one particular paragraph in discussion). And the main products of Mercury are athletic and casual footwear which are a strategic fit for the AGI. 2.02%. SWOT analysis is a strategic tool to map out the strengths, weakness, opportunities and threats that a firm is facing. Mercury was purchased by WCF in hopes to increase business revenue however this was not the case. When you want to locate an essay topic regarding a work of literature, like a novel, It is very important to consider the plot and themes of what you’ve read. An Overview of the Problem John Liedtke, the head of business development for Active Gear, Inc. wanted to acquire Mercury Athletic, footwear division of WCF. This analysis assumes that converting africans to christianity in the united states originate through the filter of the naked ego is experienced as the ideal ultimate model, in evaluating or writing it mathematically. 0% rate to project future returns. The author is everything so far as your dissertation goes. This results in a market risk premium of 3. Reasons why Mercury is an appropriate target for AGI Needless to say, to do so, you really will need to understand how the former scene ended. 4. It’s problematic for a marriage to flourish in love when you own a list of things that will force you to seek divorce. Changing the capital structure of Mercury Athletic also results in a positive NPV. The post was mentioned less frequently over time, and those who have stumbled on it later seemed to at least read the full piece. According to the case at the time of the analysis, U. S. treasury bills with maturities of 1,5,10 and 20 years were yielding 4. Mercury Athletic Footwear Active Gear, Inc. is a privately held footwear company with $470. In January 2007, West Coast Fashions, Inc, a large designer and marketer of branded apparel, announced a strategic reorganization that would result in the divestiture of their wholly owned footwear subsidiary, Mercury Athletic. Intelligent Avionics: Breaking into the Inflight Entertainment Industry Case Study Solution & Analys... Santander (E): The Acquisition Of Alliance & Leicester And Bradford & Bingley Case Study Solution. We can analyze the industry and summarize some of the critical characteristics below:  It is a highly competitive industry. Yes, we believe Mercury is an appropriate M&A target for AGI and should be pursued. In his analysis of all races and socioeconomic achievement. Analysis on Mercury acquisition 1. The Earnings before Interest after Taxes (EBIAT) cash flows of Mercury’s operations was determined using the projected EBIT calculated by Liedtke minus the assumed corporate tax rate (40%). Summary and Recommendation Given the financial projections above, Liedtke has sufficient evidence to recommend moving forward with the acquisition of Mercury Athletic. Looking at the last 78 years, the historical S&P market returns would suggest using a 10. From time to time, folks receive a work not because they’re the ideal candidate, but since they know individuals who are high up in the business. As the writer, it’s your choice to write something that may feasibly be made. The purchase price of the acquisition ($157,290,000) was estimated using the price per earnings ratio of a comparable company in the footwear industry given in case Exhibit 3. 7% results in the present value of cash flows of the acquisition is $59,440,000 (See Exhibit 1). This results in a terminal value of $276,921,000 (Cash flows in year 1 / Rate – Growth). After all, it is a scene about two characters attempting to attain a goal while having their own worries and requirements. Mercury Athletic Footwear - Acquisition Analysis ACTIVE GEAR COST OF CAPITAL ASSUMPTION Tax Rate Cost of Debt Risk Free Rate Expected Market Return Market Risk Premium Asset βeta Debt-to-Value Ratio Debt-to-Equity Ratio Equity Beta 40.0% 6.00% 4.93% 10.43% 5.50% 20.0% 25.0% 0.970 The cost equity was determined using the CAPM approach. 6. By adopting Active Gear’s inventory system, this will reduce the Days Sales Inventory (DSI) from 60 to 42. Mercury Athletic Footwear: Valuing the Opportunity. Ultimately everything will look after itself. Potential to double revenues. 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