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Prince S.A.: Valuation of a Cross Border Joint Venture

Published 01 Jan 1994
Reference 4293
Region Europe
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2003 ecch Best-selling Case

2002 ecch Best-selling Case

Summary

This case deals with the issue of a joint-venture between a UK-based multinational textile company and a Tunisian, owner manager firm. The objective of the joint-venture is to upgrade the current facilities of the Tunisian firm in order to produce garments to be distributed by the UK firm.

Teaching objectives

1. Spell out the differences in the valuation of domestic and international investments 2. The condition under which the cost of capital of an international investment may differ from the cost of capital of an identical project in an identical setting 3. The evaluation of a relevant cost of capital 4. The evaluation of expected multi-currency cash flows

Keywords
  • joint venture
  • international
  • finance
  • valuation
  • cost of capital
  • Tunisia
  • UK
  • textile