Corporate Finance Case Study Assignment -- 2

DEADLINE November 4th 2015. Your job is to analyze Sky’s 1988 entry decision from an investment perspective – i.e., it is June 1988, and you have to make a recommendation to Murdoch: either “enter”, or “stay out”. You will need to use cashflow projections of the sort shown in Exhibits 6 and 7. These are projected cashflows under the assumption that both Sky and BSB remain in the market. Unfortunately, the exhibits in the case are full of errors and inconsistencies (e.g., Sky and BSB market shares do not sum up to 100% in several years.) To make your life easier, attached is a cleaned-up version of Exhibits 6 and 7 to these questions. You should use this version as a starting point for your analysis.