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Case
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Reference no. UVA-F-1775
Published by: Darden Business Publishing
Originally published in: 2017
Version: 14 April 2017
Revision date: 24-Apr-2017

Abstract

This case examines the October 2015 initial public offering pricing decision for legendary Italian sports car company Ferrari by Fiat Chrysler management. Students are invited to model the value of Ferrari in light of Ferrari CEO Sergio Marchionne's interest in expanding production despite the company's long standing tradition of severely limiting production strategy to maintain an exclusive brand image. The case is designed to showcase corporate valuation using discounted cash flow and peer-company market multiples for a company that exists in two sectors: automotive and luxury goods.

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Abstract

This case examines the October 2015 initial public offering pricing decision for legendary Italian sports car company Ferrari by Fiat Chrysler management. Students are invited to model the value of Ferrari in light of Ferrari CEO Sergio Marchionne's interest in expanding production despite the company's long standing tradition of severely limiting production strategy to maintain an exclusive brand image. The case is designed to showcase corporate valuation using discounted cash flow and peer-company market multiples for a company that exists in two sectors: automotive and luxury goods.

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