Questions from Corporate Finance

Q: Calculate Ideko’s unlevered cost of capital when the market risk premium is

Calculate Ideko’s unlevered cost of capital when the market risk premium is 6% rather than 5%, the risk-free rate is 5% rather than 4%, and all other required estimates are the same as in the chapter....

Q: Using the information produced in the income statement in Problem 4,

Using the information produced in the income statement in Problem 4, use EBITDA as a multiple to estimate the continuation value in 2010, assuming the current value remains unchanged (reproduce Table...

Q: See Table 2.5 showing financial statement data and stock price

See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. a. By what percentage did Mydeco’s revenues grow each year from 2013–2016? b. B...

Q: How does the assumption on future improvements in working capital affect your

How does the assumption on future improvements in working capital affect your answer to Problem 13? Data from Problem 13: Using the information produced in the income statement in Problem 4, use EBI...

Q: Approximately what expected future long-run growth rate would provide the

Approximately what expected future long-run growth rate would provide the same EBITDA multiple in 2010 as Ideko has today (i.e., 9.1)? Assume that the future debt-to-value ratio is held constant at 40...

Q: Approximately what expected future long-run growth rate would provide the

Approximately what expected future long-run growth rate would provide the same EBITDA multiple in 2010 as Ideko has today (i.e., 9.1)? Assume that the future debt-to-value ratio is held constant at 40...

Q: Using the APV method, estimate the value of Ideko and the

Using the APV method, estimate the value of Ideko and the NPV of the deal using the continuation value you calculated in Problem 13 and the unlevered cost of capital estimate in Section 19.4. Assume t...

Q: Using the APV method, estimate the value of Ideko and the

Using the APV method, estimate the value of Ideko and the NPV of the deal using the continuation value you calculated in Problem 13 and the unlevered cost of capital estimate in Section 19.4. Assume t...

Q: Use your answers from Problems 17 and 18 to infer the value

Use your answers from Problems 17 and 18 to infer the value today of the projected improvements in working capital under the assumptions that Ideko’s market share will increase by 0.5% per year and th...

Q: Assume that Ideko’s market share will increase by 0.5%

Assume that Ideko’s market share will increase by 0.5% per year rather than the 1% used in the chapter. What production capacity will Ideko require each year? When will an expansion become necessary (...