{"id":434965,"date":"2018-05-03T22:19:08","date_gmt":"2018-05-03T22:19:08","guid":{"rendered":"https:\/\/essaypaper.org\/assignment-paper-custom-essay-papers-120\/"},"modified":"2018-10-24T09:01:55","modified_gmt":"2018-10-24T09:01:55","slug":"assignment-paper-custom-essay-papers-120","status":"publish","type":"post","link":"https:\/\/www.benedictsol.com\/blogs\/assignment-paper-custom-essay-papers-120\/","title":{"rendered":"Assignment Paper | Custom Essay Papers"},"content":{"rendered":"\n
\n

v:* {behavior:url(#default#VML);}
o:* {behavior:url(#default#VML);}
w:* {behavior:url(#default#VML);}
.shape {behavior:url(#default#VML);}<\/p>\n

Normal
0
false<\/p>\n

false
false
false<\/p>\n

EN-US
ZH-CN
X-NONE<\/p>\n

\/* Style Definitions *\/
table.MsoNormalTable
{mso-style-name:\u201dTable Normal\u201d;
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-priority:99;
mso-style-parent:\u201d\u201d;
mso-padding-alt:0cm 5.4pt 0cm 5.4pt;
mso-para-margin:0cm;
mso-para-margin-bottom:.0001pt;
mso-pagination:widow-orphan;
font-size:10.0pt;
font-family:\u201dTimes New Roman\u201d,serif;}<\/p>\n

\n

\u00a0<\/span><\/p>\n

The assignment is based on four documents<\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>A case study \u2018The Facebook IPO hype: a rude social awakening\u2019<\/span><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Facebook IPO prospectus<\/span><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>An Excel file containing daily share price of Facebook since its IPO (FB shareprice)<\/span><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Facebook\u2019s Annual Report 2016<\/span><\/p>\n

(i)\u00a0 <\/span><\/span><\/span>An IPO marks a strategic milestone for a company.<\/span><\/p>\n

(a)\u00a0 <\/span><\/span><\/span>Explain the benefits and drawbacks of going public.<\/span><\/p>\n

(b)\u00a0 <\/span><\/span><\/span>What motivated Facebook to go public?<\/span><\/p>\n

(10 marks)<\/p>\n

(ii)\u00a0\u00a0 <\/span><\/span><\/span>Facebook had several avenues to raise funds. Why was it relatively easier for Facebook to raise capital from the stock markets over debt? Was <\/span>an IPO the most suitable choice?<\/span><\/p>\n

(7.5 marks)<\/p>\n

(iii)\u00a0 <\/span><\/span><\/span>On page 37 of the IPO prospectus, Facebook provides information on the \u2018Use of proceeds\u2019. What is your view on how Facebook planned to use the capital raised from the IPO? Should Facebook invest IPO proceeds in financial securities?<\/span><\/p>\n

(10 marks)<\/p>\n

(iv)\u00a0 <\/span><\/span><\/span>It is incorrect to state that Facebook raised $16 billion through its IPO. Why?<\/span><\/p>\n

(5 marks)<\/p>\n<\/div>\n

\n

(v)\u00a0\u00a0 <\/span><\/span><\/span><\/p>\n\n\n
\n
\n

18\/05\/2012<\/span><\/p>\n

23\/07\/2012<\/span><\/p>\n

24\/09\/2012<\/span><\/p>\n

28\/11\/2012<\/span><\/p>\n

01\/02\/2013<\/span><\/p>\n

08\/04\/2013<\/span><\/p>\n

10\/06\/2013<\/span><\/p>\n

12\/08\/2013<\/span><\/p>\n

14\/10\/2013<\/span><\/p>\n

16\/12\/2013<\/span><\/p>\n

20\/02\/2014<\/span><\/p>\n

24\/04\/2014<\/span><\/p>\n

26\/06\/2014<\/span><\/p>\n

28\/08\/2014<\/span><\/p>\n

30\/10\/2014<\/span><\/p>\n

05\/01\/2015<\/span><\/p>\n

10\/03\/2015<\/span><\/p>\n

12\/05\/2015<\/span><\/p>\n

15\/07\/2015<\/span><\/p>\n

16\/09\/2015<\/span><\/p>\n

17\/11\/2015<\/span><\/p>\n

22\/01\/2016<\/span><\/p>\n

28\/03\/2016<\/span><\/p>\n

27\/05\/2016<\/span><\/p>\n

01\/08\/2016<\/span><\/p>\n

03\/10\/2016<\/span><\/p>\n

05\/12\/2016<\/span><\/p>\n

08\/02\/2017<\/span><\/p>\n

12\/04\/2017<\/span><\/p>\n

15\/06\/2017<\/span><\/p>\n

17\/08\/2017<\/span><\/p>\n

19\/10\/2017<\/span><\/p>\n<\/div>\n<\/td>\n<\/tr>\n<\/table>\n

<\/span>Facebook offered only Class A stock through the IPO. Who were the primary purchasers of these shares? How would new investors be affected by the dual-class share structure?<\/span><\/p>\n

(7.5 marks)<\/p>\n

(vi)\u00a0 <\/span><\/span><\/span>The underwriting investment bank takes on a central role in the IPO process.<\/span><\/p>\n

(a)\u00a0 <\/span><\/span><\/span>What are the key tasks executed by the underwriter?<\/span><\/p>\n

(b)\u00a0 <\/span><\/span><\/span>What are primary considerations when selecting an underwriter?<\/span><\/p>\n

(c)\u00a0\u00a0 <\/span><\/span><\/span>Often, multiple underwriters are involved. What are the main motivations for syndication?<\/span><\/p>\n

(15 marks)<\/p>\n

(vii)\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Assess Facebook\u2019s issue price ($38) in light of the valuation data and parameters provided in the case within DCF (Discounted Cash Flow) and CCA (Comparable Companies Analysis) techniques. Briefly evaluate the valuation performed by Prof. Damodaran in Exhibit 17 of the case study.<\/span><\/p>\n

(15 marks)<\/p>\n

\u00a0<\/span><\/p>\n

(viii)\u00a0\u00a0 <\/span><\/span><\/span><\/p>\n\n\n
\n
\n

200.00<\/span><\/p>\n

180.00<\/span><\/p>\n

160.00<\/span><\/p>\n

140.00<\/span><\/p>\n

120.00<\/span><\/p>\n

100.00<\/span><\/p>\n

80.00<\/span><\/p>\n

60.00<\/span><\/p>\n

40.00<\/span><\/p>\n

20.00<\/span><\/p>\n

0.00<\/span><\/p>\n<\/div>\n<\/td>\n<\/tr>\n<\/table>\n\n\n
\n
\n

Facebook
shareprice <\/span>performance\u00a0\u00a0 <\/span>
\u00a0\u00a0\u00a0\u00a0 <\/span><\/u><\/span><\/b><\/p>\n<\/div>\n<\/td>\n<\/tr>\n<\/table>\n

<\/span><\/span>The diagram below shows the performance of Facebook shares from May 2012 to November 2017. The first day of public trading of Facebook shares was 18 May 2012. Shares were sold in the IPO at an offer price of $38. More information on daily share price movements is available in the Excel file (FB shareprice).<\/span><\/p>\n<\/div>\n

Source: Yahoo Finance<\/span><\/p>\n

\u00a0<\/span><\/p>\n

Based on a visual examination of the chart above, how does the performance of the Facebook IPO compare with average IPO performance documented by past empirical studies<\/p>\n

\u00a0<\/p>\n

i.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>in terms of the short term performance of the Facebook IPO?<\/span><\/p>\n

ii.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>and over the longer term?<\/span><\/p>\n

\u00a0<\/span><\/p>\n

(15 marks)<\/p>\n

\u00a0<\/span><\/p>\n

(ix)\u00a0\u00a0 <\/span><\/span><\/span>In the light of the main theories of capital structure, provide a discussion of the evolution of the capital structure of Facebook since its IPO. You will find the Annual Report 2016 helpful in answering this question.<\/span><\/p>\n

(15 marks)<\/p>\n

\u00a0<\/span><\/p>\n

\u00a0<\/span><\/p>\n

\u00a0<\/p>\n

<\/div>\n","protected":false},"excerpt":{"rendered":"

v:* {behavior:url(#default#VML);}o:* {behavior:url(#default#VML);}w:* {behavior:url(#default#VML);}.shape {behavior:url(#default#VML);} Normal0false falsefalsefalse EN-USZH-CNX-NONE \/* Style Definitions *\/table.MsoNormalTable{mso-style-name:\u201dTable Normal\u201d;mso-tstyle-rowband-size:0;mso-tstyle-colband-size:0;mso-style-noshow:yes;mso-style-priority:99;mso-style-parent:\u201d\u201d;mso-padding-alt:0cm 5.4pt 0cm 5.4pt;mso-para-margin:0cm;mso-para-margin-bottom:.0001pt;mso-pagination:widow-orphan;font-size:10.0pt;font-family:\u201dTimes New Roman\u201d,serif;} \u00a0 The assignment is based on four documents \u00b7\u00a0\u00a0\u00a0\u00a0\u00a0 A case study \u2018The Facebook IPO hype: a rude social awakening\u2019 \u00b7\u00a0\u00a0\u00a0\u00a0\u00a0 Facebook Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15,1],"tags":[],"class_list":["post-434965","post","type-post","status-publish","format-standard","hentry","category-essay-paper-writing","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/434965","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=434965"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/434965\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=434965"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=434965"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=434965"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}