Financial Management Business Case – PRADA’S HONG KONG IPO

This is a business case research for Prada’s Hong Kong IPO for Financial Management course.
The aim for this case study is to answer the following questions:
Question 1: What are the pro and cons for Prada to be listed in Hong Kong?
Question 2: What are the risks (a) of getting listed and (b) of being listed?
Question 3: Comparable valuation approach, what would be the IPO price range (a) using the Forward P/E
ratio and (b) Forward EV/EBITDA ratio assuming the company sample is made of all companies?
Question 4: DCF valuation approach, what would be the IPO objective range using a DCF method.
(a) Free Cash-Flow to the Firm (FCFF) can be computed from Exhibit 3.
(b) Compute and explain why the WACC equals 8.55%.
(c) Calculate the Terminal Value assuming it is the average of the 2 methods described in the Case study.
Note that the perpetual growth rate (g) is 2.5% and that the WACC is equal to 8.55%.
(d) Finally, after discounting the FCFF and Terminal value and after consideration of the Net Debt (which
includes the Holding Debt), compute the Pre-money share price (with 2,500 million shares) and Post-money
share price (with 2,500 million shares and the newly shares issued).
Question 4: DCF valuation approach, what would be the IPO objective range using a DCF method.
(a) Free Cash-Flow to the Firm (FCFF) can be computed from Exhibit 3.
(b) Compute and explain why the WACC equals 8.55%.
(c) Calculate the Terminal Value assuming it is the average of the 2 methods described in the Case study.
Note that the perpetual growth rate (g) is 2.5% and that the WACC is equal to 8.55%.
(d) Finally, after discounting the FCFF and Terminal value and after consideration of the Net Debt (which
includes the Holding Debt), compute the Pre-money share price (with 2,500 million shares) and Post-money
share price (with 2,500 million shares and the newly shares issued).
Further details needed, please refer to the files attached.
All the needed date are included in the order as well.
The length of the business case is based on the case study questions which will be not less than 10 pages,
also I need after calculation the excel file (Attached).
Note: Forward P/E Ratio, Forward EV/EBITDA ratio, DCF valuation approach, IPO objective range using a
DCF method,, FCFF, WACC, Terminal Value, Pre-money share price, Post-money share price.
Attached are the following:
1- Prada Case Study (PDF).
2- Prada Case data (Excel).
3- The course materiel’s (5 sessions) pdf. (This is for your reference).