MBA PROGRAM ASSIGNMENT ASSESSMENT FORM Instructions to the student: Please complete the grey box and staple this form to the front of your assignment. Student Name: Student Number: Program: 0 PMBA Module (Course) Title: Financial Performance Measurement (check one) x MBA Professor/Instructor: Assignment Title: Exam Case Analysis: AltaGas Acquisition of Decker Energy. I certify that this assignment is my own work, that it has not been copied from elsewhere, and that any extracts from books, papers or other sources have been properly acknowledged as references or quotations. Signed: To be completed by the professor/instructor: 1. Strengths ; 2. Weaknesses 3. Grading rationale (From course handbook) 4. Points for improvement Grade: % Penalty: Final Grade: Date: Second marker comments (sample only) Distribution of Copies: Original – Student Photocopy – MBA Office (where required through second marking process) ? MBA 521 Exam, April 2019 This assignment consists of an individually prepared analysis of a financial case study. IMPORTANT: Rename this file and the excel file with your name and section number; (e.g., JohnSmith72) Save the two files to the desktop; Save the work in process often in case the computer crashes; When completed, drag and drop both files to the Dropbox folder on the desktop; Check with the invigilator before shutting down to ensure the files have been properly deposited; Once you are sure that they have been posted, log off and leave quietly. Do not attempt to use other programs, messaging or the internet. Do not attempt to use the computer’s USB ports; if you have any questions during the exam, put your hand up, the invigilator will come to you. Part marks are assigned for partly completed work. Do as much as you can, even if you feel that the conclusions are not correct. Materials that may be brought into the case exam session include: (a) a clean (non-annotated) copy of the case; (b) financial calculator; and (d) other course materials allowed and specified by instructors. Bags and personal effects must be left at the front of the room during the exam. You have three hours to analyze the case and type up answers to the following questions (percentages indicate the grading importance of the item) Key formulae: Constant Growth Terminal Value=(?FCF?_n (1+g))/((r-g) ) PV TV= (?FCF?_n (1+g))/((r-g) (1+r)^n ) CAPM=r_e=r_f+?(r_m-r_f ) WACC=r=?D/V r?_d (1-tc)+?E/V r?_e Hamada Equation with taxes ?l = ?u [1+ (1- tc )D/E] ? Do not attempt to use other programs, messaging or the internet. Do not attempt to use the computer’s USB ports; if you have any questions during the exam, put your hand up, the invigilator will come to you. Part marks are assigned for partly completed work. Do as much as you can, even if you feel that the conclusions are not correct. You have three hours to analyze the case and type up answers to the following questions (percentages indicate the grading importance of the item): ? Questions: Estimate AltaGas cost of capital based on data provided in the spreadsheet. What impact should this Canadian WACC have on the evaluating the cash flows of the Acquisition of Decker Energy International? (15%) Using the base-case assumptions for 2012-2016 provided in the case information, Exhibit 8a and those mentioned above, as well as the WACC that you have calculated, provide: a financial forecast for the next five years for both Grayling and Craven; Estimate value to Decker International of the combined acquisitions of Craven Energy and Grayling in US Dollars (including fees, credits and ownership %). (25%) (3) Perform sensitivity analysis and other risk analysis you consider appropriate on key variables and assumptions of this investment. Identify the effect critical risks that may affect acquisition value. Which risks are the most important and can they be managed? (25%) (4) Identify any real options that would be created because of the acquisition. What information would you need to value these options? (10%) (5) Provide your overall assessment of the opportunity and a well-supported recommendation to proceed or not. Be careful to include qualitative factors in your final recommendations. (25%)

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