Paramount Essay Example | Topics and Well Written Essays - 1000 words

Paramount - Essay Example Based on the financial statements, the EBITDA, and other indicators the investment in Paramount is a very lucrative investment decision. Refer to Excel Sheet Q1 to Q7. Based on question 5 sheet of the excel file, The merger between Paramount and Viacom will result to total combined sales of $ 6,697. Both companies cater to the same industry like entertainment, networks & broadcasting. The merger will result to cost of sales reduction and expenses of 30%. Please refer to question 5 excel sheet attached for . The only similar business they serve is the networks business. Therefore the estimated cost of sales and expenses reduction will only be an estimated 10% because the other business lines that are disadvantageously unique to one company. These are the entertainment, broadcasting, live entertainment & publishing sectors. The growth rate of Paramount will be increased by the entrance of Viacom because EBITDA will be increased as shown in the excel computations attached. This can be explained by looking at question 12 sheet of the excel file attached. The market value of the combined synergy between Viacom and Paramount is $ 42,105.30( refer to question 9 sheet of the excel file. Whereas, the market value where Paramount is not combined with Viacom is only $ 28,056.30 as computed in excel file question 8 sheet. What would happen to costs & sales growth if Q... Computations are shown in question 5 sheet of the excel file attached. What effect would Viacom have on Paramount's growth rateThe growth rate of Paramount will be increased by the entrance of Viacom because EBITDA will be increased as shown in the excel computations attached. This can be explained by looking at question 12 sheet of the excel file attached. The market value of the combined synergy between Viacom and Paramount is $ 42,105.30( refer to question 9 sheet of the excel file. Whereas, the market value where Paramount is not combined with Viacom is only $ 28,056.30 as computed in excel file question 8 sheet. What would happen to costs & sales growth if QVC bought Paramount The cost and expenses is estimated to decrease by only 10 %. The sales increase is sales will be lesser. This is discussed in question 5 sheet of the excel file. 4. What is Paramount's worth as it is What is its worth to Viacom What about QVC Argue from point of savings / synergies that Viacom would achieve. Paramount is worth is $ 28, 056.30 as shown in Question no. 9 sheet in the excel file below. When Viacom joins Paramount the additional earnings before taxes, deprecation and amortization generated for Viacom is from $134 in 1994 to $223 in 1998. Paramount is worth $7,595.75 when the multiple values are used. Paramount will be very happy when Viacom joins Paramount because now Paramount can use the facilities of Viacom to enter into territories where Viacom is having a good business. Viacom in return can use the facilities of Paramount to enter into territories dominated by Paramount. 5. Should Redstone Continue What price should he offer Should the offer Cash Stock Or combination What should he do about lock out