Please see the instruction below. I have also attached the case study, my own notes to help answer the first question as well as materials from class to help with the case study
This is my final for my advanced corporate finance class, I am expected to analyze the attached Humana Inc. case. In my analysis, I should address the following questions:
1) What corporate structure would you recommend for Humana? That is, describe the advantages and disadvantages of the restructuring options considered by the firm. Place special emphasis on the spin-off alternative. Do you think the spin-off is a good idea? Why is management considering it?
2) Assume that the spin-off alternative is chosen. How would you have it be financially structured? What should the resulting financial structures of the separate firms look like?
3) What price should you expect to get for the spin-off? How much value is created from the spin-off? I am looking for thorough valuation analysis. A DCF analysis will require that you make some assumptions. I will give you a lot of leeway in making your assumptions — I am just looking for good logic — so determine what assumptions you need to make and SPELL THEM OUT. In addition, assume that the inflation rate is 3% and Government Bond rates are 4% for T-bills, 5% for the 5-year UST, and 6% for the Long Bond.
• Address the questions above in a memorandum.
• Write it as if you were writing a recommendation to the CEO or major decision maker in this case
• 5 pages double spaced with 10-12 pitch.
• Calculations and Exhibits must be attached separately as Exhibits.
• Put name on cover page only
• describe my assumptions.
• the paper should address the issues raised in an integrated essay.
• I am looking for good arguments and logical descriptions
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