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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