Valuation of AirThread Connections Case Solution & Answer

This Case is about COMMUNICATION, COSTS, FINANCIAL ANALYSIS, ORGANIZATIONAL STRUCTURE, TECHNOLOGY

PUBLICATION DATE: March 01, 2011 PRODUCT #: 4263-PDF-ENG

This case may be used as a capstone valuation exercise for first-year MBA students in an introductory finance class. The acquisition would give accessibility to American Cable to the wireless spectrum as well as wireless technology. Nowadays, a hole in the organization’s service offering (that is wireless) could enable the business to provide competitive service packages.

Students must think about the result of continuous debt versus the D/E (debt-to-equity ratio) in estimating betas as well as the expenses of capital. Additionally, students examine the effects of non-operating assets on valuation. As an added responsibility, teachers can require students to think about the synergies American Cable expects in order to reach the following acquisition in addition to the private tax disadvantage of debt.

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