14.16 Using the M&A Valuation and Deal Structuring Model accompanying this text (see the website address in the “Chapter Overview” section at the beginning of this chapter) and the data contained in the cells as a starting point, complete the following:

a. What is the enterprise and equity value of Target on the Valuation Worksheet?

b. On the worksheet named Target Assumptions, increase COGS (cost of goods sold) as a percent of sales by one percentage point (i.e., 0.43–0.44) on the Target Assumptions Worksheet. What is the impact on the Target’s enterprise and equity values? (Hint: See Valuation Worksheet.) Undo change or close the model but do not save the results in order to restore the model’s original data.