All questions refer to the IPO of Alibaba. You can find information on Alibaba in the newspaper article http://dealbook.nytimes.com/2014/07/21/for-alibaba-investors-the-benefits-and-risks-of-trusting-jack-ma/?_php=true&_type=blogs&_php=true&_type=blogs%E2%80%A6 and in the excerpt of its IPO filing attached.
Question 1 (30 Marks)
Why does Alibaba want to list in the US? How does its IPO differ from a regular IPO, and how do the differences matter to potential investors?
Question 2 (30 marks)
How much is Alibaba worth? Use a discount rate of 10%. State your assumptions clearly and discuss how much your answer is sensitive to them.
Question 3 (40 marks)
Consult a potential US-based investor regarding potential risks of an investment into Alibaba ADRs. How does Alibaba itself hedge foreign exposure?