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Published byJennifer Evans Modified over 9 years ago
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RELEASE SEQUENCE TheatreDVD/Blu-Ray Online Entertainment Content Provider TV Licensing Licensing Fee = 63%*DVD/Blu-Ray Revenue
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TASK 1
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WACC 2013 Ke : 17.42% E/V : 66% Kd : 1.98% Tax : 40% D/V : 34% WACC = 11.84% Quarter WACC = 2.84%
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REFERENCE GROUP
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CAPITAL BUDGETING
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TASK 2
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WACC 2014 Ke : 66% E/V : 16.89% Kd : 34% Tax : 40% D/V : 1.98% BP : 100 WACC = 12.49% Quarter WACC = 2.99%
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ADJUSTMENTS Box Office Revenue (-24%) DVD/Blu-Ray (+12%) Extra Cost : IP restriction ( -$15,000 ) NPV : -2,077,995.11 IRR : -0.13%
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TASK 3
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ADJUSTMENTS Problem: Box Office Revenue (-90%) To breakeven: DVD/Blu-Ray price (+115%) Licensing rate (+192.77%) DVD/Blu-Ray Price (+94%), Licensing rate (+19.04%)
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ADDITIONAL RECOMMENDATION Movie scene dissection selling to independent movie maker as advertisement footages reuse footage for upcoming projects
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QUESTIONS ?
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