CaseStudyBBC
Guidelines for written case analysis
Working in teams of up to four students your task will be to recommend an IPO price for the Boston Beer Company, Inc. Your grade will be based on your answers to the assigned case questions. You do not need to list the question and then your answer (as you might do for a problem set). The questions are there to serve as a guide to arrive at the solution of the case. As such, answers to these questions should be integrated as part of the report and you are free to answer the questions in any order you deem appropriate. Your analysis should be well organized and have a natural flow. I will base your grade on both the accuracy of your analysis and on how well it is written. Please do not submit write-ups longer than SIX pages for the case (double-spaced). Please use as little space as possible in summarizing the case facts. Your tables, plots and calculations should be attached to the report and are not part of the page limit. The text should contain only the results of your calculations. Boston Beer Company- Case Analysis
You are the investment banker assigned with the task of setting the IPO price for the
Boston Beer Company (BBC). Prepare a research report to support your recommendation.
As you prepare this report, you may find that you would like to have more field information than what the case offers you. However, the case contains critical information that gives you a reasonable basis to compute its valuation. In addition use the following information for 1995.1
Redhook
Pete’s
BBC
Sales ($ millions)
25.1
58.7
150.8
EPS
0.78
0.22
0.47
Book Value/ Share
7.92
4.24
3.02
Price
27.35
24.80
?
Also, use the following information for BBC for 1996. Make additional assumptions as necessary (and state any additional assumptions) to compute free cash flows for subsequent years: 1. The ratio of earnings before taxes to sales for 1996 is 15%
2. Tax rate is 34%
3. For every dollar of
Working in teams of up to four students your task will be to recommend an IPO price for the Boston Beer Company, Inc. Your grade will be based on your answers to the assigned case questions. You do not need to list the question and then your answer (as you might do for a problem set). The questions are there to serve as a guide to arrive at the solution of the case. As such, answers to these questions should be integrated as part of the report and you are free to answer the questions in any order you deem appropriate. Your analysis should be well organized and have a natural flow. I will base your grade on both the accuracy of your analysis and on how well it is written. Please do not submit write-ups longer than SIX pages for the case (double-spaced). Please use as little space as possible in summarizing the case facts. Your tables, plots and calculations should be attached to the report and are not part of the page limit. The text should contain only the results of your calculations. Boston Beer Company- Case Analysis
You are the investment banker assigned with the task of setting the IPO price for the
Boston Beer Company (BBC). Prepare a research report to support your recommendation.
As you prepare this report, you may find that you would like to have more field information than what the case offers you. However, the case contains critical information that gives you a reasonable basis to compute its valuation. In addition use the following information for 1995.1
Redhook
Pete’s
BBC
Sales ($ millions)
25.1
58.7
150.8
EPS
0.78
0.22
0.47
Book Value/ Share
7.92
4.24
3.02
Price
27.35
24.80
?
Also, use the following information for BBC for 1996. Make additional assumptions as necessary (and state any additional assumptions) to compute free cash flows for subsequent years: 1. The ratio of earnings before taxes to sales for 1996 is 15%
2. Tax rate is 34%
3. For every dollar of