1. Is Sun Micro systems a good strategic fit for Oracle? 2. What approaches would you use to place a value on Sun Micro systems? 3. Assuming a discounted cash flow valuation: a. What rate of return should Oracle require on the acquisition? b. What base-case cash flows do you forecast? c. What is your estimate of terminal value? d. What is the enterprise value of Sun Micro systems? What is the equity value? 4. Conduct a multiples analysis to value Sun. What economic fundamentals are reflected in the multiples? 5. Identify the synergies and conduct a sensitivity analysis to estimate the effect of synergies on enterprise value. 6. If a competing bidder appears, how high a price should Oracle be willing to offer?
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