Arundel Case

Arundel Partners: The Sequel Project Case study Outline executive director Summary 2 Summary of Facts3 field of study of Problem3 Investment analysis4 paygrade methods: Discounted Cash accrue (supported by adjoin 1)5 last Tree (supported by Annex 2)6 Real options (supported by Annex 3)7 Contract provisions7 Recommendations8 Executive summary The main problems arising in Arundel Partners investment decision in a portfolio of posteriority rights is how to value these rights in nightclub to determine whether such investment makes sense, how much they should pay for these rights and the contractual provisions that should be agreed upon with the studios in order to array the incentives of both parties. By analyzing all the information available, we can plead that there is big(p) potential for value generation for Arundel, as the studios atomic number 18 uncoerced to accept low prices for the protraction rights, due to the point that , in general, these rights were non sold in that period and they were not withal taken into assureation when the first movie was produced. From Arundels perspective, the protraction rights can be mattered, on average, undervalued securities.

When using the Discounted Cash hunt approach and the decision tree method, we have discovered that ii of the six studios considered for collaboration namely, MCA Universal and The Walt Disney participation have continuation rights that generate a positive net present value. Since we consider that the real options approach best mimics the reality of this case, we also charter this method on a studio portfolio basis, and discover th at to a fault the two studios mentioned abo! ve, Warner Brothers sequel rights also seem to be underpriced. In this setting, we recommend that Arundel Partners pay a maximum of US$5.55 zillion for MCA Universal, US$7.96 million for Warner Brothers and US$9.75 million for the Walt Disney Company sequel...If you requirement to get a full essay, order it on our website: OrderEssay.net

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