Your report should consist of the normal case report – a brief description of the case, an explanation of the problem, alternative solutions, your recommendations, including materials, such as spreadsheets, needed to justify your recommendation
The discussion questions are guidelines about the case. As guidelines you can use the questions to identify the case issues as well as respond to those issues.
1. The shares of American Greetings are currently trading at an EBITDA multiple that is at the bottom of its peer group. Do you think a 3.5-times multiple is appropriate for American Greetings? If not, what multiple of EBITDA do you think is justified? What is the implied share price that corresponds to that multiple?
2.Please model cash flows for American Greetings for fiscal years 2012 through 2015 based on the two sets of ratios in case Exhibit 8. Based on the discounted cash flows associated with the forecast, what is the implied enterprise value of American Greetings and the corresponding share price?
3.What are the key drivers of value in your model?
4.What do you believe to be the value of American Greetings shares? Do you recommend repurchasing shares?