Paginas Amarelas

Darden Business Publishing Cases

ISSN: 2474-7890

Publication date: 20 January 2017

Abstract

This case serves as a foundation for student discussion of the estimation of required rates of return (ROR) on investments in emerging markets. An associate in J.P. Morgan's Latin America M&A department (mergers and acquisitions) is assigned the task of valuing the telephone directory operations (“paginas amarelas” means “yellow pages”) of a large Brazilian conglomerate. All cash flows have been converted to U.S. dollars, and present values computed for various discount rates. The remaining step is to determine the appropriate target rate of returns for dollar flows originating in Argentina, Brazil, and Chile. The capital asset pricing model (CAPM) is used along with a political risk premium and country beta. The necessary figure work is comparatively light, leaving the student time to reflect on the need for various adjustments in estimating crossborder rates of return.

Keywords

Citation

Bruner, R. and Wanderley, M. (2017), "Paginas Amarelas", Darden Business Publishing Cases. https://doi.org/10.1108/case.darden.2016.000226

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Publisher

:

University of Virginia Darden School Foundation

Copyright © 1998 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved.

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