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1. How much is the Bet Performer worth based on comparable transactions (no regression needed
here)? Which ship is the best reference transaction (the closest comparable)?
2. Regression Analysis
a. What is the expected relationship between ship price and each factor listed in Exhibit 4
(size, age, and charter rates)? What is the economic logic for why each factor might
affect ship value?
b. Can you think of other factors that might predict ship prices?
c. How well do all three factors jointly explain ship prices?
d. Using all three factors, what is the predicted price for the Bet Performer?
e. What would the price be if the Bet Performer were 5 years younger (6 years old rather
than 11 years old), if the ship were 20K DWT smaller (152K DWT rather than 172K DWT)
or if charter rates in May 2008 were 30% lower (the trailing Capesize Index were 8,735
instead of 12,479)? In each case, assume all other factors remain the same.
3. If you were Basil Karatzas, what would you recommend to your client regarding an offer price
for the Bet Performer? What concerns, if any, would you have? What recommendations would
you make?
>Sheet : Sales of Capesize Ships from January 0 to May 200 .0
99
8 0.2
.0
91
0.2
4,647 4,647 1995 12 4,647 4,647 8 .0
17 4,878 0.0
3 5
5,245 5,245 .0
20 5,245 1995 12 158.0 5,245 .0
1990 17 .5
5,245 6 $95.0 2001 6 170.1 5,752 1994 13 5,752 1995 12 5,752 Apr-07 $62.0 1994 13 5,752 .0
.8
5,752 1996 11 May-07 10 6,201 1996 11 170.0 6,201 $67.0 1994 13 .0
23 6,618 .0
1984 23 .0
Jul-07 2001 6 6,980 26 .8
5 1995 12 21 8,886 $45.0 1984 23 8,886 Oct-07 1984 23 8,886 1996 11 Nov-07 Gran Trader 2001 6 172.6 9,663 Nov-07 1993 14 149.5 9,663 Nov-07 .0
24 9,663 Nov-07 15 .2
9,663 1987 20 1986 21 10,299 17 2004 4 10,526 20 $83.0 19 26 11,193 1999 9 11,193 2004 4 170.0 1993 15 1990 18 12,4791
Exhibit
4
20
7
8
Sale Price
Year
Age at Sale
Dead-Weight Tons
Trailing 1-Year Average Monthly Baltic Dry
Sale Date
Vessel Name
($US millions)
Built
(Years)
(000)
Capesize Index
1
Jan-07
Lowlands Beilun
$7
3
1
9
17
4,
6
47
2 Jan-07
CHS Moon
$4
5
19
16
15
3 Jan-07
Spring Brave
$62.0
1995
12
151.1
4 Jan-07
Martha Verity
$60.0
158.0
5 Jan-07
TMT TBN
$61.3
1993
14
174.7
6
Feb-07
Pantelis SP
$83.0
1999
169.9
4,878
7 Feb-07
Amazon
$
45
1990
149.5
8
Mar-07
Cape Kassos
$
10
2004
170.0
5,
24
9 Mar-07
Johnny K
$65.0
1994
13
165.3
10 Mar-07
Zorbas
$70.0
1996
11
165.1
11 Mar-07
Americana
$
33
1987
149.0
12 Mar-07 Martha Verity
$63.0
13 Mar-07
Ullswater
$
43
1
23
14
Apr-07
Formosabulk Brave
$95.0
2001
170.1
5,752
15 Apr-07
Formosabulk Clement
16 Apr-07
Nautical Dream
$63.5
151.4
17 Apr-07
Formosabulk Allstart
$67.0
150.4
18
Arimathian
149.8
19 Apr-07
Boss
$
31
1985
22
1
39
20
May-07
Zorbas II
$86.0
174.5
6,201
21
Fertilia
$50.5
1997
172.6
22 May-07
Ingenious
$64.2
23
Jun-07
Anangel Dawn
149.3
6,618
24 Jun-07
Orient Fortune
$
28
1984
161.4
25
Jul-07
Great Moon
$
30
1
46
6,980
26
Gran Trader
$105.0
172.5
27
Aug-07
Cape Brazil
$22.0
1981
1
40
7,4
41
28
Sep-07
Thalassini Kyra
$133.0
2002
164.2
8,181
29
Oct-07
Tiger Lily
$90.0
149.2
8,886
30 Oct-07
Dong-A-Helios
$47.0
1986
146.9
31 Oct-07
Marine Hunter
164.5
32
Peace Glory
$57.0
166.1
33
Nov-07
Sumihou
$106.0
171.1
9,663
34
$152.0
35
Netadola
$97.0
36
Nordstar
$
38
1983
150.7
37
Captain Vangelis L
$87.5
1992
1
48
38
Dec-07
Voutakos
$78.0
188.3
10,299
39 Dec-07
Sachuest
$35.0
98.4
40
Jan-08
Sinfonia
$83.7
1991
184.4
10,526
41 Jan-08
Jin Tai
$155.0
173.9
42
Feb-08
Dias
$58.0
1988
135.0
10,8
44
43
Mar-08
Desimi
1989
207.1
11,193
44 Mar-08
Samos
$25.0
1982
137.0
45 Mar-08
Cape Sun
$135.0
171.7
46
Apr-08
Nightflight
$158.0
11,614
47
May-08
Cape Falcon
$87.2
161.5
12,479
48 May-08
Castle Peak
$82.0
145.4
Source: Adapted from Compass Weekly Market Report (various issues) and Thompson Reuters Datastream, accessed 7/25/10.
Sheet2
Sheet3
