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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

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A fruit packing plant usually shuts down for three months each year. during that period, what happens to its costs? its fixed co
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5 0
3 years ago
KTZ manufactures and distributes cutting edge hockey equipment. It has decided to streamline some of its operations so that it w
Nady [450]

Answer:

Consider the following explanations and calculations

Explanation:

part 1

a)  KTZ sold an office building for $85,000 in cash. It originally bought the office building seven

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Ans- Bookvalue on date of sale= $59000- $ 14000= $ 45000

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As per section 1231, out of profit of $40,000, amount of $14000, i.e till the amount of depreciation will be an ordinary income and $26000 (40000-14000) will be considered capital income.

b)

KTZ sold another machine for $6,200. It originally purchased this machine six months ago for

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c)

KTZ sold some of its inventory for $5,000 cash. This inventory had a basis of $8,000

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d)

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e)

KTZ sold a machine that it used to make computerized dies for $26,300 cash. It originally bought

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part 2

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Ordinary gain= 14000+3000+4000= $21000

Ordinary loss= $ 1570

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