Team Capstone Project

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The Tuck Bridge Capstone Project allows students to apply the skills they acquire in the classroom to analyze and value a real-world business.

Each team will select a publicly-traded company, analyze its business, and determine how much the company is worth. At the end of the Business Bridge program, teams will present their recommendations and conclusions to professionals from major investment banks, international consulting firms, peers, and members of the Tuck faculty.

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Overview & Objectives

Students will choose a public company and derive an “intrinsic value” for the company. A commonly accepted definition of intrinsic value is “The price a rational investor is willing to pay for an investment, given its level of risk”. When you use intrinsic value, you’re following a key tenet of Berkshire Hathaway CEO Warren Buffett’s philosophy: “Never invest in a business you cannot understand.”

Intrinsic value measures the value of an investment based on its cash flows. Where market value tells you the price other people are willing to pay for a company, intrinsic value generates a company value based on an objective analysis of a company’s current and expected future performance and risk. Bridge students will learn and apply the discounted cash flow (DCF) method for calculating the intrinsic value of the public company they chose. To determine DCF, students need to estimate future cash flows and select an appropriate discount rate. Through the DCF, they will learn both fundamental drivers of company value as well as the nuanced competitive and economic factors that influence those fundamental drivers.

This project is not meant to be a stock-picking exercise (even though many “stock pickers” and Wall Street analysts would conduct a similar investigation). Rather it is the kind of analysis that would be conducted by a buyer interested in acquiring the entire business. Based on their extensive company analysis, each team will make a recommendation to such a potential acquirer. The recommendation will include the purchase price that the investor would be willing to pay for all the company’s equity. Students should also strive to offer suggestions as to how the new owner might improve the company’s performance going forward.

 

Support Along the Way: The Role of Tuck Faculty and Bridge FELLOWS

Students will have many resources available to help them complete the project. Aside from the tools that they will acquire in the classroom, teams will work closely with a designated Bridge Fellow (Tuck MBA student), who will guide them throughout the process. Students will also have access to Tuck’s library and its experienced research librarians who will support them as they collect data and conduct research. Selected examples of project presentations and slides will also be made available to current Bridge students.

In addition, most Bridge faculty will offer one session during the program to assist students in applying the material covered in their course to the project. In addition, each group will have several opportunities to meet one-on-one with a Bridge faculty member to assess progress and ask questions. Of course, all members of the Bridge faculty will be available to help you answer questions that require specific domain expertise at any point during the program.

 

Goals & Growth: What Students Gain

Bridge students will have approximately two weeks to select a public company, gather data, conduct a series of analyses, create a slideshow that clearly and succinctly communicates their findings, and present their recommendations to an authentic audience. Time management, teamwork, goal setting, and communication will be among the essential life skills that this project will both challenge and nurture.

Participation in the Capstone Project will help prepare students for a wide range of career paths. This experience will help students become better decision-makers and communicators in any organizational setting.

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