Case ID: 289056     Author: Frank Moore    Subject: Cost Accounting Price $ 75

Unwrapping The RJR Nabisco Business Case Study Solution

Solution ID: 8610     Words: 1407

RJR Nabisco Case Study Abstract

Gives students the chance to look board of directors met in a leveraged buyout. RJR Nabisco is valued using various operating methods and the source of profits in leveraged purchases is emphasized upon. Download guide on case study analysis in Word Doc, Ppt or in PDF file with excel solution.


Case Details

Industry: Food, Tobacco

RJR Nabisco Case Excel Calculation

Prebid operating strategy, MG operating strategy, KKR operating strategy

 Calculating present value of cash flows 1989-1998

 Calculating terminal value

 Grand NPV

 Calulating Weighted Average Cost of Capital (WACC)

 Calculating Cost of Equity

 Calculating Cost of Debt

 WACC

 Total Value of RJR Nabisco

 Per share value

RJR Nabisco Case Study Solved Questions Answers

1. What was the value of RJR Nabisco under:

 a) the pre-bid operating strategy?

 b) the Management Group’s operating strategy?

 c) KKR’s operating strategy?

You need to conduct detailed valuation using the information given in the exhibits for each strategy and general information in the case

2. What accounts for any difference in the value of the three  operating plans?

3. Evaluate the Special Committee’s use of an auction of RJR  Nabisco?

4. Which bid should the Special Committee select, if any? What  other actions should the Special Committee take?