What is an IPO and why is it such a big deal? Is this a good idea for JetBlue?2. What do you think...

Question

What is an IPO and why is it such a big deal? Is this a good idea for JetBlue?2. What do you think JetBlue stock is worth?3. Does the financial forecast in Exhibit 13 seem reasonable? What are the key assumptions? Is the length of the forecast period reasonable?4. What discount rate is appropriate for the cash flow forecast?5. What was your approach for terminal value? How do your terminal value assumptions affect the estimated value of JetBlue shares?6. What are the pros and cons of using a comparable multiple approaches in valuation?
	
Document Preview: Please no plagiarism. Do not used Wikipedia references. Please use book, articles, but legitimate references. Create a case study report that presents your analysis and conclusions.  Make sure to Use Free Cash Flow valuation to estimate the value of JetBlue and its price per share. Please use APA format. 1. What is an IPO and why is it such a big deal? Is this a good idea for JetBlue?2. What do you think JetBlue stock is worth?3. Does the financial forecast in Exhibit 13 seem reasonable? What are the key assumptions? Is the length of the forecast period reasonable?4. What discount rate is appropriate for the cash flow forecast?5. What was your approach for terminal value? How do your terminal value assumptions affect the estimated value of JetBlue shares?6. What are the pros and cons of using a comparable multiple approaches in valuation?

Robert · Accepted Answer

1. What is an IPO and why is it such a big deal? Is this a good idea for JetBlue? 
An IPO is called an initial public offer because it is first time that the organization is going to the 
public to offer its shares for subscription. It is a big deal because the shares are listed with the 
Stock exchange and for the first time people get an opportunity to invest. It is also a big deal 
because there are so many formalities that have to be completed mandatorily before the shares 
are issued to the public .It is a good idea for JetBlue because the firm wants to exit out of its 
venture capital loses and look at avenues to increase its financing .the management took the right 
decision of going in for an IPO supported by experts at Morgan Stanley who were the co lead to 
the issue.  
2. What do you think JetBlue stock is worth? 
I think that the Jet blue stock which was very thoughtfully projected to be issued at a discount is 
worth the effort because, the jet blue stock   is underpriced when looking at the IPO valuation.  
when the initial  price   range for Jet Blue during the road   show was pitted between $22 - 24 which was 
as per the predecessors IPO and how it was valued and what happened  during and after the IPO. There 
were clear example of Delta and  South west. When the IPO was listed the management of Jet Blue fixed 
the price  between $25 – 26 . I believe  that the Jet blue stock is worth the price at which it is offered 
because the stock  is  very attractive holding and not being very aggressive makes it worth every penny . 
3. Does the financial forecast in Exhibit 13 seem reasonable?

What is an IPO and why is it such a big deal? Is this a good idea for JetBlue? 2. What do you think JetBlue stock is worth? 3. Does the financial forecast in Exhibit 13 seem reasonable? What are the...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment