Question

Due to a sudden downturn in the California economy, the State of California decides it needs to lighten its load and also raise some cash by selling off some of its assets. It has decided that “education is overrated” (and that people can just learn anything through youtube anyway) and is considering a secret plan to sell CSUSM. Yep, the whole shebang is on sale as a package – the school, name & brand, students, buildings, land, students, team sports, even that cougar mascot (whatever its name is). As a business major who has taken finance, the Governor of California (“da Guv”) has hired you to consider and report back on how much it could get for the sale, and the pros and cons of the financial factors affecting the possible price. One urgent factor, Pepperdine Univ has come with a “take it or leave it” offer that it is flexible to possibly may more than others, but it would need to stretch out the payments over 7 years. Da Guv wants to know is that offer worth considering at all? What factors would affect it? Should da Guv make a counteroffer that would improve the total return for the sale?

Answer 1