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Hansson Private Label, Inc.

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by

Michael Wang

on 20 February 2014

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Transcript of Hansson Private Label, Inc.


Target of Hansson and Its Position in the Industry
Revenue
Gross Operating Profit
Net Income
Revenue Growth Margin
Free Cash Flow Analysis
WACC Analysis
Model
WACC
&
CAPM
NPV & Sensitivity
Analysis
SWOT Analysis
Conclusion
Positive NPV?
Hansson Private Label, Inc.
Evaluating an Investment in Expansion

Private Label
Personal Care Industry
by Qing Wang, Xue Sun, & Zhonghao Wang
1/5th of all personal care products purchased are private label brands
Hansson holds 28% of private label portion of personal care industry
Contract with most major national and regional retailers
Input
EV=514.5
Debt=107.6
10-year Treasury Bill Rate=3.75%
Rb(Cost of Debt)=7.75%
Asset Beta=1.18
Risk Premium=5%
Tax Rate=40%
Outcome
Equity=EV - Debt=406.9
Eb(Equity Beta)
=Asset Beta*(1+Debt/Equity)=1.49

Rs(Cost of Equity)
=Rf + Equity Beta*Risk Premium=
11.21%
WACC=Equity/(Debt+Equity)*Rs +
Debt/(Debt+Equity)*Rb*(1-Tax Rate)
=
9.84%
NPV
$14,491.52
Sensitivity Analysis
Full transcript