Date: Monday, April 23, 2007
Case: Benninger Packaging Inc. (UVA F-draft)
Read:
1. Review Luehrman HBR Reprint 97306
Network File: Benninger.xls
Assignment:
1. Use the APV approach discussed in Session #11 to value the new company (assume the specialized financing is not available). Assume that Benninger is forecasting a long run growth rate of 4.0% for the business and the market risk premium is 5.0%.
2. Use the APV approach to revalue the proposal considering the specialized financing. What difficulties did you encounter?
3. What is the value of the special financing package?
4. Would you recommend that Benninger go ahead with the project?