Post on 05-Jul-2018
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Welcome
to ourPresentation
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Case AnalysisUAL 2004: Pulling out of
Bankruptcy
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Prepared for……
M. SADIQUL ISLAMPROFESSOR
DEPARTMENT OF FINANCEUNIVERSITY OF DHAKA
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!roup "o: 2#
$%a%adat &ossain '( B A )*: +,-.#+/(untasir a%man 1%an '( B A )*: +,-
#04/A ul &asan 3ara '( B A )*: +,- #0#/
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"o5Presenting………(d A ul &asan 3)*: +,-#0#
ProblemStatement
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Company Pro6le
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Case 78er8ie5
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9conomic Analysis
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P9$ L9 analysis
Pol t !al E!onom ! So! al
Te!"nolo# !al Le#al En$ ronmenta
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S%OT Anal&' '
S%OT
Stren#t"'
%ea(ne''
O))ort*n te'
T"reat'
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R '( Anal&' '
Sale' Var ab l t&Part !*lar' +,,+ +,,- +,,
Re$en*e / +01 /-2+ ., , /33 1.,,
Stan4er4 4e$ at on o5
Re$en*e7--.,+
Mean Re$en*e / 3/0.12
Re$en*e Var ab l t& 8CV9 ,.,1
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Altman ;
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F nan! al R '(
Part !*lar' +,,- +,,
*3L 0 ,4
imes )nterest 9arned -2 >@ -0 @2
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DUPONT ANALYSIS
DUPONT ANALYSIS Year 200< 2004
ROE= net n!ome> e?* t&= 8net n!ome>net 'ale'9 @8net 'ale'>total
a''et9@8total a''et>e?* t&9
Net Pro t AT>Re$en*e' -0 0@@+ -0 02#+
Re$en*e'>Total A''et' 0 #2 0 ,2
Total A''et'>Sto!("l4r'. E?* t& -< ,2 -< 2#
ROE 4, 4# 2+
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Problem Statement
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Present Case aluation:3C33 (et%od
AssumptionsTaB rate ,.-
Term nal #ro t" rate ,.,/3
Probab l t& O5 D 'tre'' ,.3
Co't O5 D 'tre'' ,.+
TaB rate ,.-
Term nal #ro t" rate ,.,/3
Probab l t& O5 D 'tre'' ,.3
Co't O5 D 'tre'' ,.+
WACC Calculation
isk-free rate
(arket eturnBeta Cost of eDuity Cost of de t
aE ateAfter taE cost of de t
alue of eDuity alue of de t
Weig%t of eDuity Weig%t of de t Additional risk premium
WACC
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Base Case aluation: 3C33(et%od
otal p8cf 2>22+ +
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$imulation G $ensiti8ityPresent Case
C 0 >2,H0 .0= so= P$ is more $ensiti8e P$ (ost $ensiti8e to WA
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Amount
Weig%ted
Amount
Present +2=,2, #=
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"o5Presenting………$%a%adat &oss)*: +,-.#+
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Cas% 3lo5 Under Alternati8es
Continuation of pension fund
Ca'" nee4e4
Payment and termination of capitallease +4+2
Payment of account paya le 2 4
Contri ution to pension fund 4
otal cas% 6nancing #>4+ #>
Cas% a8aila le
ermination of pension plan
Ca'" nee4e4
Pa&ment an4 term natt on o5 !a) tallea'e /
)a&ment o5 lon# term 4ebt / 0/.+
Pa&ment o5 a!!o*nt )a&able +-0.
l ?* 4 t& nan! n# 3,,
Total -1-/.1
Ca'" nan! n#
EB t F nan! n# +,,,
Pro!ee4' 5rom 'ale o +1+1.10
Total !a'" nan! n# 1+2
Ca'" a$a lable 773
l f
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aluation: Continuation of pensionfund
A''*m)t on'
%ACC ,./,11
TaB rate ,.-
Term nal #ro t" rate ,.,-3
Probab l t& O5 D 'tre'' ,.+
Co't O5 D 'tre'' ,./
isk-free rate
(arket eturn
Beta
Cost of eDuity
Cost of de t
aE ate
After taE cost of de t
alue of eDuity
alue of de t
Weig%t of eDuity
Weig%t of de t
Additional risk premium
WACC
isk-free rate
(arket eturn
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Val*at on Cont n*at on o5)en' on 5*n4
Total PVCF -3+01.
A44 !a'" / ,,0
F rm Val*e 7 +7
Le'' !o't o5 nan! al 4 'tre'' 703.00+
D 'tre'' a4G*'te4 rm $al*e 0 -,0
Le'' Lon# Term Debt ---+.2
Val*e o5 e?* t& 723
no o5 '"are' o*t 'tan4 n# /, ,,,
$al*e )er '"are . 7233
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$imulation G $ensiti8ity:Continuation of pension fund
C 0 +2+>J0 .0= so= P$ isless $ensiti8e
P$ (ost $ensiti8e to WA
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"o5 Presenting……(untasir a%man1%an)*: +,-#04
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Val*at on Term nat on o5)en' on )lan
A''*m)t on'
WACC 0 ++4#
aE rate 0 <
erminal gro5t% rate 0 0
Beta +Cost of eDuity +0 .0Cost of de t > 00
aE ate .
alue of de t >=+#.Weig%t of eDuity 0
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Val*at on Term nat on o5)en' on )lan
otal p8cf + #<
Add: cas% +0=24>
3irm alue 42=
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$imulation G $ensiti8ity ermination of pension plan
C 0 +.4+J0 .0= so= P$ is less $ensiti8e P$ (ost $ensiti8e to WA
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ecommendation
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Kusti6cation
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Any uery MMMM