To solve quantitative and qualitative research in business finance.?In this multi-player simulation, students each play the role of a CE
Background:
To solve quantitative and qualitative research in business finance. In this multi-player simulation, students each play the role of a CEO at 1 of 3 publicly traded wine producers: Bel Vino, Starshine, or International Beverage. Bel Vino and Starshine consider a merger-of-equals transaction while International Beverage considers acquiring either Bel Vino or Starshine. Students review confidential information to determine the value and set reservation prices before negotiating deal terms. Stock prices rise and fall in reaction to the formal bidding process and help create a dynamic and competitive negotiation environment. The simulation is entirely web-based and a built-in chat feature allows students to negotiate privately online.
Your assignment should demonstrate thoughtful consideration of the ideas and concepts presented in the course by providing new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards.
Questions to be answered in your report:
Write a research report that outlines the topics
* Describe and Critique simulation. Give specific consideration to the different outcomes.
* Explain how each of your considerations influenced your decisions and what impact it had on the share price.
* What process would you use to estimate these discount rates to see if they are reasonable?
* As the CEO, how would you approve the share price? Do you believe it is ethical? How would you request external funds, either debt or equity if the company was not selling?
* Identify and integrate Peter Drucker principles into the decision-making process that is appropriate and insightful.
Requirements of the assignment:
* All papers must follow all APA.
* All papers must have a reference page. The textbook is an acceptable source.
* Body of the paper 6 pages, no more or less.
* Title page and reference pages are required. However, they do not count towards any page count.
* Writing should reflect an understanding of the chapter’s basic concepts, thorough research, and logic and critical thinking skills.
* The introduction is attention-getting with sufficient background information to establish the topic and a clear thesis statement.
* The conclusion summarizes the main points and leaves the reader with a strong comprehension of the paper’s significance and the author’s understanding.
* Provides Christian Perspective to ethics.
* Grammatically correct – No spelling, grammar, or mechanics errors.
* Do not use the first person. (10% deduction if used)
FINANCE SIMULATION: M&A IN WINE COUNTRY
HOW TO PLAY
OVERVIEW
Roles
You will play the role of CEO for one of three wine producers:
Bel Vino
Starshine
International Beverage
Merger or Acquisition?
Bel Vino and Starshine, two mid-size wineries, are considering a merger of equals which involves an exchange of equity.
International Beverage, the largest of the three companies, is considering acquiring either Bel Vino or Starshine for cash.
Simulation Structure
Round 1: Determine and submit reservation prices for Bel Vino and Starshine
Round 2: Active bidding & negotiation
© 2013 HARVARD BUSINESS SCHOOL PUBLISHING 2
NAVIGATION
Prepare
Introduction | How to Play | Historical Stock Price | Valuation Exercise
Analyze
Financial News
Bel Vino
Starshine
International Beverage
Calculators
Consolidated Statements
(IB role only)
© 2013 HARVARD BUSINESS SCHOOL PUBLISHING 3
PREPARE
The Prepare screen provide a variety of preparatory materials:
How to Play
User video and detailed steps to complete the simulation
Download the Foreground Reading to learn more about the U.S. wine industry and the simulation context
Review the Terminology Primer to learn key terms before beginning the simulation.
Introduction
Read the role-specific screen text to learn more about your assigned company
Historical Stock Prices
Users can review historical stock prices behavior for each of the three companies as part of preparation.
Valuation Exercise
An Excel-based exercise (your instructor may choose to have you complete). You may have to check a box stating you’ve completed the exercise to proceed into the simulation.
© 2013 HARVARD BUSINESS SCHOOL PUBLISHING 4
ANALYZE
The Analyze screens display all of the financial information that’s
available to users:
Financial News: This screen will populate as users make offers in Round 2.
Company-specific screens: including
Operating Assumptions
Financial Statements
Valuation Methods
Calculators
Pro-Forma Consolidated Statements (IB role only)
Chat: built-in chat available for private online communications with users representing your counterpart at the other firms. Green dots signal when players are online.
© 2013 HARVARD BUSINESS SCHOOL PUBLISHING 5
ANALYZE: OPERATING ASSUMPTIONS
The objective of Round 1 is to familiarize yourself with the financial
statements and the various valuation methodologies available in the
simulation. You’re provided Confidential Information to inform your
entries on the Modify Assumptions screens.
The numbers you input on this screen will automatically flow through to
adjust the 5-year projections on the various financial statements (available
on other screens) which feed the valuations.
Navigate to each company’s tab to enter Assumptions for that company.
© 2013 HARVARD BUSINESS SCHOOL PUBLISHING 6
ANALYZE: FINANCIALS
Detailed Financial Statements screens are included for all 3 companies.
Income Statement
Balance Sheet
Cash Flow Statement
Ratio and Growth Rates
Three years of historical data are also provided. Players can toggle tabs to see another company’s data.
© 2013 HARVARD BUSINESS SCHOOL PUBLISHING 7
ANALYZE: VALUATION METHODS
The simulation offers a number of different Valuation Methods
WACC-Based DCF
Discount Rates + Terminal Value This screen illustrates the assumptions driving the determination of the discount rates used to calculate cash flow and the methodology for determining the terminal value. NOTE: There are numerous values here that players can modify but should not do so unless specifically instructed to do so by the faculty.
Comparable Companies This screen is included in order to provide “peer” financials for each role to consider as another means for arriving at a valuation. Checkboxes are included to include or exclude the various comparable companies from computed averages. The three simulation companies are included as well as four additional “peer” companies. The foreground reading includes additional information on the peer companies.
Comparable Transactions This screen allows you to review “similar” transactions for use in determining value.
Adjusted Present Value
© 2013 HARVARD BUSINESS SCHOOL PUBLISHING 8
ANALYZE: CALCULATORS
The Calculators provided vary depending on the role assigned:
Bel Vino and Starshine
Share Exchange Calculator allows users playing the Bel Vino and Starshine roles to determine the appropriate numerical exchange
ratio associated with a merger bid.
Accretion and Dilution Calculator allows all players to determine the potential for EPS accretion or dilution associated with a merger
or acquisition.
International Beverage:
Leverage Decision Calculator allows International Beverage to determine the financing associated with a proposed acquisition.
Since IB must make a cash offer for either Starshine or Bel Vino, IB
must use a combination of debt and cash to finance the proposed
deal. The total financing must be equal to the total offer.
© 2013 HARVARD BUSINESS SCHOOL PUBLISHING 9
ANALYZE: PRO-FORMA CONSOLIDATED STATEMENTS
Users playing as IB can toggle to select
Target Company by clicking the icons to
pre-populate consolidated data for Bel Vino
or Starshine
Consolidated Income Statement
Consolidated Balance Sheet
Consolidated Cash Flow Statement
© 2013 HARVARD BUSINESS SCHOOL PUBLISHING 10
The International Beverage role is provided three consolidated financial statements.
DECIDE: SIMULATION ROUNDS
The simulation is divided into 2 rounds:
Round 1 In Round 1, users determine and submit reservation
prices. Each role must input reservation values for
both Bel Vino and Starshine. Note that your
instructor may restrict you to just entering
reservation prices as a first step, temporarily limiting
play to Round 1.
Round 2 In Round 2, reservation prices have been set, and
each role can begin active bidding and negotiation.
© 2013 HARVARD BUSINESS SCHOOL PUBLISHING 11Round 2 Bidding: IB
Round 2 Bidding: BV & SS
Round 1 Bidding for all roles
DECIDE: ROUND 2 BIDDING
© 2013 HARVARD BUSINESS SCHOOL PUBLISHING 12
In Round 2, you can submit offers to
the other companies. You can only
submit one offer at a time. Once an
offer is submitted, the bidder has the
option to Withdraw Offer.
When another company makes you an offer, you’ll see your
pending offers. You may receive competing offers. Each offer
requires you to respond.
Reject to continue negotiations
Accept to formalize the deal and end the simulation.
Deal outstanding: option to withdraw
Two pending deals to consider
The simulation ends when two of the teams make an agreement:
END OF SIMULATION:
© 2013 HARVARD BUSINESS SCHOOL PUBLISHING 13
Collepals.com Plagiarism Free Papers
Are you looking for custom essay writing service or even dissertation writing services? Just request for our write my paper service, and we'll match you with the best essay writer in your subject! With an exceptional team of professional academic experts in a wide range of subjects, we can guarantee you an unrivaled quality of custom-written papers.
Get ZERO PLAGIARISM, HUMAN WRITTEN ESSAYS
Why Hire Collepals.com writers to do your paper?
Quality- We are experienced and have access to ample research materials.
We write plagiarism Free Content
Confidential- We never share or sell your personal information to third parties.
Support-Chat with us today! We are always waiting to answer all your questions.
