Is Sun Microsystems a good strategic fit for Oracle? Use a discounted cash flow (DCF)...

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Accounting

Is Sun Microsystems a good strategic fit for Oracle?

Use a discounted cash flow (DCF) analysis to place a value on Sun Microsystems:

-What rate of return should Oracle require on the acquisition?

-What base-case cash flows do you forecast?

-What is your estimate of terminal value?

-What is the enterprise value of Sun Microsystems? What is the equity value?

Identify the synergies and conduct a sensitivity analysis to estimate the effect of synergies on enterprise value.

If a competing bidder appears, how high a price should Oracle be willing to offer?

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