Questions to ask 1. Why is the P/B multiples for Petes and Redhook so different?

low ROE of Redhook and high EPS (all due to its different structural and business strategies) Redhook is most profitable because of it has least e penses especiall! in S"#. $. How do you justify for using Boston Beer and Petes implied growth assumption to represent the whole segment? % the! are the biggest pla!ers in the craft brewing segment which means the! are influential o&er the likel! mo&ement the segment will e perience in the future' and the demand for those two firms ma! be representati&e of the demand for the whole segment. (owe&er we do recogni)e that these dominating pla!ers ha&e a higher competiti&e ad&antage relati&e to the smaller pla!ers hence the growth figure ma! be inflated (conclusion is the same with a lower growth rate gi&en it*s a ridiculousl! high figure) 3 What ta! rate +. Where did you get the figures for the "apital stru"ture in W#$$? % Why did you use histori"al figures from the &alan"e sheet? intended for target capital structure ,. How a""urate is the model as a refle"tion of market 'aluations gi'en the 'ast amount of assumptions made? sensiti&it! anal!sis can be performed to check the error of the assumptions' though ,-. is such an inflated figure' a lower number would probabl! gi&e the same conclusion /. 0.