Landmark Facility Solution Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Answer 1
The business of Broadway competes on the pricing of products and the competition in the quality of the service is very high. This gives an opportunity to Broadway to create value for the shareholders to increase their shareholder value. The value for shareholders can be created specifically by the economies of scale which the company would get from the acquisition.
The operating margin of Broadway is also low and the company can cut the executive or top management pay and can reduce itscosts and will also increase the operating profit margin.The company should also cut those marketing costs which are not worthwhile for the company as the costs incurred do not tend to provide any type of benefit to the business.
The acquisition of the company would lead to several synergy benefits for the company and the benefits include the elimination of the overhead expenses which are incurred by both the companies separately.
Landmark Facility Solution Harvard Case Solution & Analysis
The company would get several tax benefits as the tax can claim for the losses which are being occurred in thelandmark.
The acquisition would further lead to a big company being formed and hence this will help the company compete and will also increase the market share of the bigger company which would be formed after the acquisition of the landmark company. The increased level of market share will lead to the company being able to use this high market share in its marketing campaigns and can have a significant impact on the customers. The customers can be attracted by this and the company might become the market leader after the acquisition of the landmark company as the landmark company would also have a high market share.The combined company would have a bigger customer database and a higher market share will have a chance of increased revenue which will also increase due to the synergy benefits as the synergy benefits will drive costs down and profits up.
Answer 2
Equity Beta:
Asset beta is also known as anunlevered beta as this measures the systematic risk of the market. Inanother words, this beta measures the volatility of the market before the incorporation of the financial gearing effects hence after incorporating financial leverage effect on this beta, we can compute the equity beta of any particular company. (Corporate Finance Institute)
Comparable Company1 Comparable Company2 Comparable Company3 Average
Tax Rate 35%
Market Value of Equity 6186.912 3151.659 500.06
Market Value of Debt 5887 355 289
Equity beta 1.69 1.25 1.56
Asset beta 1.04 1.16 1.13 1.11
Debt/Equity ratio 95.15% 11.26% 57.79% 54.74%
Relevered beta 1.51

The asset beta of the facility service industry is 1.11. To calculate this beta, we take the equity beta of three companies from facility service industry then we convert these equity betasinto asset betas and take their averages.
After that, we calculate the equity beta of Landmark Facility Solutions using the average of debt/equity ratio of some companies and the average asset beta hence the resulted equity beta is 1.51....................

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