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Discounted Cash Flow Analysis – Part II

This report details the final three steps for building a DCF model, following on from ‘Discounted Cash Flow Analysis – Part I’ The third step is to Calculate Weighted Average Cost of Capital (WACC). WACC is the average rate at which a company is expected to pay its equity and debt holders. It is dependent…
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Hypothesis Testing and its Applications

Hypothesis testing is a method of statistical inference used to test a belief or claim about an unknown but fixed parameter θ of a population, using observed data from a subset of the population. By performing a hypothesis test on the measured sample, a statement can be made about the general population parameter θ by…
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Uber to buy leading alcohol delivery service Drizly in 1.1 billion USD deal

Earlier this month (February 2, 2021) the rideshare and delivery giant Uber announced its 1.1 billion USD acquisition of Drizly, an on-demand alcohol marketplace. Despite the modest size of the transaction, representing roughly 1% of Uber’s total market value, Uber’s shares rose around 7% upon announcement. As for Drizly, with a modest valuation of 73 million…
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Teledoc Acquires Livongo for an astounding 18.5 billion USD: The transition to digital healthcare

On the 5th of August 2020, one of the largest healthcare deals in 2020 was announced: multinational healthcare giant Teladoc’s 18.5 billion USD acquisition of digital health-management company Livongo, with American Investment Bank Piper Sandler valuing the joint firm at a reported 37 billion USD. Throughout the deal process, Teladoc and Livongo’s financial advisers were…
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Salesforce Acquisition of Slack set to be ‘a match made in heaven’?

‘A match made in heaven’: these were the words of Salesforce CEO Marc Benioff following the completion of his company’s acquisition of the enterprise communication platform, Slack. The deal, announced on the 15th December 2020, is set to cost Salesforce approximately 27.7 billion USD. Relating to Slack, a company that is currently valued at around…
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U.S. – China Tensions Boost Rare Earth Stocks, but is the Current Rally Sustainable?

The rare earth elements (REEs), or Lanthanoid series in the periodic table, are a group of heavy metals that are widely used in modern technologies. Smartphones, electric vehicles (EVs) and renewable energies are some of the modern products that depend on the unique magnetic and electrical properties of REEs to function. Each F-35 fighter jet,…
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Breaking Down ExxonMobil Stock – A Veteran of Oil & Gas

ExxonMobil has long been a market leader in oil & gas. The direct descendent of Standard Oil Co., Rockefeller’s oil empire, which was the largest refiner in the world at its height, ExxonMobil remains the company with the sixth largest net revenue in the world. However, after several bleak years beginning in 2015, the company’s…
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Synthetic Diamonds: An Intimidating Competitor for Mined Diamond Companies

First synthesised successfully in 1954, synthetic diamonds have become ever easier and efficient to produce, especially over the last 20 years, aided by growing technology. Synthetic diamonds, not just aesthetically but chemically and physically identical to their naturally formed counterparts, are increasingly posing a threat to the mined diamond industry. According to a report commissioned…
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The Driving Forces Behind Big Pharma’s Debt Downgrades

Big pharmaceutical companies’ credit ratings in the United States have been steadily dropping in the eyes of rating agencies since 2014. There have since been approximately 20 downgrades and only three upgrades among investment-grade firms. Despite these companies receiving acclaim for their rapid response to the COVID-19 pandemic, the strong barriers to competition in the…
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Prescription drug prices: US vs the world

Worldwide prescription drug spending has been on the rise for several decades, as new research discoveries have propelled the sale of life-changing medicines. However, the prices of prescription drugs are not equal among nations, with the US consistently ranking among the highest in the world (see Figure 1). For example, research in 2018 found that…
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