Business Finance Homework Help

*********Case is in file attached********

write a two-page paper which provides a methodology that
could be followed to actually solve the case.The strategy paper need
not be an actual solution to the case — it may simply explain how one
would go about solving the case, step by step.The strategy paper is
being prepared for the approval of a senior financial manager who is
completely familiar with the background of the problem.Therefore the
strategy paper should skip background details and deal only with
recommended procedures.The paper is procedural
rather than descriptive.The level of detail that is appropriate in
describing the procedures depends upon the objective of the particular
case.For example, If an important objective of the analysis is to
determine the amount of additional funds that will be required to
support a new project then it is obviously not sufficient to make a
statement such as: “Step 3, determine the additional funds
requirements.”Instead, exact and detailed procedures should be outlined
for determining the amount of external financing required, being careful
to identify any peculiarities or complications that are unique to that particular case

Bidding for Hertz

1.How
does the dual-track process used by Ford to initiate “considerations
for strategic alternatives affect the bidding process for Hertz?

2.In
what ways does hertz conform or not conform to the definition of an
“ideal LBO target”? Do you believe Hertz is an appropriate buyout
target?

3. Strategically, what value-creating opportunities can the sponsors exploit in this transaction?

4.How
realistic are the key assumptions that underlie the bidding Group’s
projections in case Exhibits 8, 9, and 10? Which assumptions are most
likely to have the largest impact on returns?

5.Based on the
base-case estimates in case Exhibits 8, 9, and 10 and your estimate(s)
of terminal value if the sponsors put up $2.3 billion in equity, what
return can they expect to earn?

6.If Carlyle desires a 20% target
return on its equity investment, does your analysis suggest that $2.3
billion is too much to pay, or can it afford to pay more – in either
case, by how much?

7.What is the market-required rate of return for this investment, and why might this differ from the sponsors’ target return?

8.What is the value of Hertz using the equity residual method of valuation?

9.Assess
the amount ford is likely to receive if it pursues its IPO alternative
versus being bought by a private equity group. –….l

10.What factors would be considered in assessing whether the consortium’s bid is likely to beat that of a rival group?