Landmark Solutions
Read Landmark Case and answer the Questions below
1. Why is Harris acquiring Landmark? What are the sources of synergy? Do you believe these synergies can be realistically achieved?
2. What is the appropriate discount rate for valuing the acquisition?
3. Derive the pro forma free cash flows of Landmark and Broadway and value both companies after the acquisition. What is the value of this acquisition to Broadway, under both expected and pessimistic scenarios? Should Harris proceed with his $120 million bid? \
4. Which financing alternative should Harris chose? What are the implications of the chosen financing method for Broadway’s capital structure? Can Harris afford the debt service? How much equity in the combined firm does Harris give up by opting for the mix of debt and equity financing alternative?
5. Discuss the interaction of operating strategy and capital structure decisions. What are the potential effects of financing on the NPV of the acquisition?
Words Limit: #1000 Words