Overview Case considerations Key topics

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Overview Case considerations Key topics 8/25/2019 American Greetings Overview Case considerations Key topics 8/25/2019 Senior Seminar in Finance Senior Seminar in Finance

Senior Seminar in Finance 8/25/2019 Overview January 1, 2012 Management is considering a stock repurchase to help shore up flagging stock price and low valuations. Spreadsheet available: American Greetings.xls 8/25/2019 Senior Seminar in Finance Senior Seminar in Finance

Senior Seminar in Finance Case considerations What is going on at American Greetings? What are the primary reasons for the stock price declines? Is AG properly valued based on analysis? What are it’s prospects? Is a stock repurchase program an appropriate response to the current situation? Why? 8/25/2019 Senior Seminar in Finance

Senior Seminar in Finance Case considerations Valuation analyses available: Comparable multiples Discounted cash flow over scenarios Need to establish discount rate and terminal value 8/25/2019 Senior Seminar in Finance

Senior Seminar in Finance Key topics Equity distribution policies Role of stock repurchasing in signaling “true” value Technology and effects on “traditional” businesses Valuation 8/25/2019 Senior Seminar in Finance