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Description
This is an interactive multimedia case that details the acquisition of a Chinese company by a Spanish one. In the analysis certain variables are considered that apply to this international context.
After carrying out the valuation a simulator is presented that uses the Monte Carlo method to define the following variables: exchange rate country risk premium and sales. The value of the company and the profitability of the operation are obtained using a probabilistic method running a thousand iterations in which these three variables change following pre-established patterns.
The results of the equity and the profitability of the operation are presented in accordance with their associated probability through interactive charts and graphs.
Author's comments
This multimedia case analyzes the technical elements that should be taken into account when carrying out an international valuation. The student will have the opportunity to follow in detail step by step one of the methodologies that could be applied in these kind of scenarios. Due to the internal context of the case it is also possible to discuss qualitative aspects about investing abroad (politic economic and social aspects). Finally students have the possibility of carrying out Monte Carlo simulations on a group of variables and in this way obtain a range of results associated with their probabilities.
