Cox-Communications

NOVA School of Business and Economics Spring Semester 2013/2014

REPORT TO THE BOARD OF DIRECTORS

Recommendations on Gannet’s acquisition and Capital Structure

Applied Corporate Finance Professor: Paulo Pinho T.A’s: Raul Afonso; Ricardo Barahona

Group 8: Daniela Gameiro #701 Luís Faria #715 Catarina Batista #750 Frederic Muller #774

APPLIED CORPORATE FINANCE

Cox Communications, Inc.

TABLE OF CONTENTS

Executive Summary......................................................................................................................3 1. Cox Communications, Inc. And the Market ...............................................................................4 2. Computing the NPV within Gannet’s Acquisition.......................................................................4

2.1. Weighted Average Cost of Capital (WACC) .............................................................................................. 5 2.2. Estimating Cash Flows .............................................................................................................................. 7 2.3. Discounting the cash flows ....................................................................................................................... 7

3. Short-term and Long-term Financing ........................................................................................9 4. Constraints on the financing needs ......................................................................................... 10

4.1. Cox Family............................................................................................................................................... 10 4.2. Financial Flexibility ................................................................................................................................. 11 4.3. Strong Balance Sheet .............................................................................................................................. 12...