Threshold Sports – Valuation of the Company – Discounted Cash FlowSummary:The case in study takes a peer into the dilemma facing Threshold Sports. The situation at hand has the company at the crossroad. The companies founders David Chauner and Gerard Casale Jr. are trying to decide how they will take the company to the next level. The company is in need of $500 to bring their vision to fruition. The problem is they are not certain as to how to go about ascertaining this so they have set up a meet with Mr. Firstborn a consultant who is also a member of the board. The company is a marketing and event planning company which targets the US cycling market. Their aim is to increase the cycling industry attraction to levels similar of those in the European arena.
Assumptions:Risk free rate that will be used is 6% this was chosen as a bench mark seeing that the capital of this capacity is similar to a 30 year loan so the parity will be with that of a 30 year US treasury security.
The cooperate tax rate will be 40%AnalysisValuation of the Company – Discounted Cash FlowThe method chosen for the company valuation is the discounted cash flow model. It was a generous decision, seeing that the company base its prospect on its growth potential than its current position. Its high level of intangibles and its low levels of fixed assets create a difficult situation for the company to employ the much more suited option of debt. The companys primary motivation at this point of time is to create more of a demand and establish a brand. With the dramatic increase of bicycle sale and the recent Tour de France win by Lance Armstrong the sport has drastically grown in popularity. To add to this new surge the company founders hope their expertise and passion will be enough to create a lucrative market which will in time mimic that of Europe.
Lancelot
Investment adviser and global head of business development
$10,000 investment
Lancelot is a leading investment adviser & head of business development for the companies of Luxembourg and the Netherlands. It has advised more than 50 companies which have a combined market capitalization of $40-250 billion which includes the largest two companies of companies from the Netherlands and Belgium whose share capital ranges from €55-80 billion. They also have a total market capitalization of over $400 billion.
More info: www.el-clintes.nl
Babylon Investment Truste
$30,000 investment
Babylon Investment Truste is a high risk investment trust, offering a value for money investment model for its portfolio of companies. The firm has a unique approach to business model with a unique investment plan as well as an investment structure which is in line with the firm’s objective to create a market-ready and sustainable business for its business. Fund management is by the investment team and in-depth analysis of all the factors would be beneficial for a fund. Their clients include large corporations or entities like state-owned private insurance firms, financial institutions, and public sector financial institutions like banks, insurance companies, investment brokers, and other traditional finance entities such as banks and insurance companies.
More info: www.bolifanet.nl
Bavaria Asset Management
15% cash flow
Bavaria Asset Management operates a 24 x 19 business model on the advice and advice of an expert financial advisor for companies like Bombaflex, KKR, Royal Bank of Scotland, and Barclays and their global clients. The plan is to create a company in the near future which would have an effective cash flow growth of 15% and a significant shareholder value of 0.5%. Since the company is not going to use debt as an issue, the company invests in equity, fixed income, and other sources of income and sells the equity that is sold to high yield investors.
More info: www.bavariaamerikle.nl
Bavaria Investment Group
50% cash flow
Bavaria Investment Group is a high cost global hedge fund and has invested in the U.S., Canada, Japan, Norway, Australia, China , Italy, and Japan. The company has invested in the U.S., Australia, Canada, India, India, Japan, Australia, and Europe and has invested in some Asian markets.
More info $10,000 investment
Bavaria Investment Group is a 30-50% growth model. Each year, the company has $50 invested in stock, bonds, and derivatives. This includes:
– equity/cap futures on equity securities,
– fixed income/securities of a publicly traded company,
– other stocks, fixed or mutual funds (other than mutual funds)
– equity/securities on U.S. foreign exchange markets, including bonds and other derivatives
– shares which are held in trust by the company to manage their investment. This includes shares held of the government but may be invested in commercial paper or investment trusts with no stake.
More info : www.boramaria.net
Barracuda Inc
$20,000 investment
Barracuda Inc is leading a 20-30% growth