there was no financial analysis attached. I had expected to see a comparable analysis along with a detailed DCF analysis. Take a look at the lecture and the attached materials I presented last night. Would strongly urge you to complete the case study and answer question No. 4:
Using the information provided, what should Spotify’s shares be trading at on the first day of its listing? Would you recommend that Ms. Wang invest in Spotify? If so, at what price and investment horizon? For the Discounted Cash Flow analysis, assume a beta of 1.17, a Risk Free Rate of 2.85%, a Market Risk Premium of 5% and that after the offering, the Company will not have any debt (since the convertible debt will be converted to equity). For purposes of this question, limit your investment analysis to the DCF method and the Comparable Company method.
This will involve detailed financial analyses.
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Assignment Questions:
1. Assess the current economic and market climate (as of the date of the planned IPO). Assess the music streaming industry. How is Spotify disrupting the industry? What are some of the key success industry factors?
2. Evaluate Spotify’s past financial performance. What are some of the takeaways from your analysis?
3. What are the differences between a traditional listing and the direct listing being pursued by Spotify?