1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Naddika [18.5K]
3 years ago
7

IDX Technologies is a privately held developer of advanced security systems based in Chicago. As part of your business developme

nt​ strategy, in late 2013 you initiate discussions with​ IDX's founder about the possibility of acquiring the business at the end of 2013. Estimate the value of IDX per share using a discounted FCF approach and the following​ data: bullet ​Debt: $ 40 million bullet Excess​ cash: $ 108 million bullet Shares​ outstanding: 50 million bullet Expected FCF in​ 2014: $ 49 million bullet Expected FCF in​ 2015: $ 51 million bullet Future FCF growth rate beyond​ 2015: 4 % bullet ​Weighted-average cost of​ capital: 9.4 %
Business
1 answer:
dimulka [17.4K]3 years ago
4 0

Answer:

Check the explanation

Explanation:

(Kindly note: all numbers in millions)

Discounted Cash Flow valuation of company's operating assets as of 2013 year end= PV of FCF in Yr 2014+Terminal FCF in Yr 2015*(1+Terminal growth rate)/(WACC-Terminal growth Rate)

=49/1.094+51*1.05/(0.094-0.05)

44.79+44.79/0.044

=1062.69

Firm equity value= Value of net operating assets+Cash-Debt=1062.69+108-40=1130.69

Value of IDX per share=Firm equity value/No of shares outstanding=1130.69/50=22.61

You might be interested in
The constant dividend growth model: a. is more complex than the differential growth model. b. requires the growth period be limi
Finger [1]

Answer:

The correct answer is letter "D": can be used to compute a stock price at any point in time.

Explanation:

The Gordon Growth Model, also known as the Constant Dividend Growth Model, is used to measure the value of the stock at any point in time based on the projected future dividends of the stock. Investors and analysts are commonly used to compare the estimated value of the stock against the current market price. Analysts interpret the gap between the two prices as proof that the stock could be under or overvalued by the market.

8 0
3 years ago
Samantha and Bethany are purchasing their first home and reviewing the terms of a 15-year mortgage with their lender, Jim, at Fi
Alona [7]

Jim is doing what is<u> legally </u>right by providing this information to Samantha and Bethany.

<h3><u>The Truth in Lending Act (TILA): What Is It?</u></h3>

A federal statute known as the Truth in Lending Act (TILA) was passed in 1968 with the intention of assisting customers in their interactions with creditors and lenders. The Federal Reserve Board implemented the TILA through a number of regulations. The act's disclosure requirements for information like the annual percentage rate (APR), the length of the loan, and the overall costs to the borrower are some of its most significant features. The borrower must be made aware of this information clearly on all documents before signing them, including occasionally on periodic billing statements.

Learn more about The Truth in Lending Act (TILA) with the help of the given link:

brainly.com/question/7696024?referrer=searchResults

#SPJ4

4 0
2 years ago
Luana loves shopping for clothes, but considering the state of the economy, she has decided to start saving. At the end of each
Zina [86]

Answer:

Luana will save $2,493.522

Explanation:

Given:

Luana will deposit $570 every year for 4 years. This is an annuity as same amount is deposited every year.

Rate is 6% or 0.06

We have to compute Luana's savings at the end of 4th year.

Refer future value of annuity factor table at 6%, 4th year. Annuity factor is 4.3746.

Savings = Yearly deposit × Annuity factor

             = 570 × 4.3746

             = $2,493.522

Therefore, Luana will save $2,493.522 by the end of 4 years.

6 0
3 years ago
3. There a number of market entry strategies that businesses use in entering into markets outside their countries. a) Distinguis
sattari [20]

Answer:

a) Distinguish between the use of Franchising and Joint Venture as modes of entry into other countries by global businesses.

Franchising consists in the licensing of aspects of production and intellectual property to a another party: the franchise.

A Joint Venture is a business union between two or more parties, in which they split profit as well as costs and responsabilities.

b) What are the respective advantages and disadvantages of both strategies?

Franchising can be a quicker way to expand into foreign markets. The flexibility of the method, and the lower capital requirements are the reason why. This can be seen in the success that American fast-food brands have had using this method to expand in global markets.

A Joint-Venture can be more difficult to use for market expansion, however, it can be more profitable, because the profit will not be split among as many parties as in franchising, and more importantly, the firm maintains a higher control of the operation.

7 0
3 years ago
Your company buys a car, and its value goes down over time. What is that process called?
kozerog [31]
The correct answer would be B. Depreciation
4 0
4 years ago
Read 2 more answers
Other questions:
  • For a large sporting event the broadcasters sold 6565 ad slots for a total revenue of ​$145145 million. what was the mean price
    10·1 answer
  • The two reasons why bankruptcy is a false concern about the public debt are:
    7·1 answer
  • Berning Company purchased a tractor at a cost of $180,000. The tractor has an estimated salvage value of $20,000 and an estimate
    6·1 answer
  • . Intellus has long-term debt of $5 million, owners' equity of $7.5 million, current assets of $1 million, gross fixed assets of
    14·1 answer
  • Trisha is appointed as the new CEO of an automobile manufacturing company. She decides to introduce a new set of organizational
    7·1 answer
  • Select the item that can be answered by using knowledge. 1. A transaction's order date, amount sold, and quantity ordered 2. Tak
    14·1 answer
  • Flexo Trucking Company transports hazardous waste. Garn is a Flexo driver, whom the company knows drives longer hours than feder
    15·1 answer
  • 1. What is global business?
    11·1 answer
  • Given the following, compute the cost of goods manufactured.
    15·1 answer
  • Define ''limited in stock''
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!