Subject category:
Finance, Accounting and Control
Published by:
Ivey Publishing
Version: 2021-07-12
Length: 19 pages
Data source: Published sources
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Abstract
This is a Simplified Chinese version. In May 2019, a retail investor in the Philippines had to decide whether or not to immediately sell his shares in Holcim Philippines, Inc (HPI). The San Miguel Corporation had just announced the acquisition of around 86% controlling interest in HPI. The price of HPI had increased considerably in the months leading up to the acquisition announcement, and this investor was anticipating a large gain. Now, he needed to run a fair value estimate of HPI's price using both the capital asset pricing model (CAPM)-based discounted cash flow method and the comparable multiples method in order to decide what to do: Should he sell his shares at the prevailing market price, wait until the future potential tender offer, or hold his shares indefinitely?
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Abstract
This is a Simplified Chinese version. In May 2019, a retail investor in the Philippines had to decide whether or not to immediately sell his shares in Holcim Philippines, Inc (HPI). The San Miguel Corporation had just announced the acquisition of around 86% controlling interest in HPI. The price of HPI had increased considerably in the months leading up to the acquisition announcement, and this investor was anticipating a large gain. Now, he needed to run a fair value estimate of HPI's price using both the capital asset pricing model (CAPM)-based discounted cash flow method and the comparable multiples method in order to decide what to do: Should he sell his shares at the prevailing market price, wait until the future potential tender offer, or hold his shares indefinitely?