Take another look at the valuations of Rio in Tables 19.1 and 19.2 . Now use the live spreadsheets on this book’s Web site ( www.mhhe.com/bma) to show how the valuations depend on:

a. The forecasted long-term growth rate.

b. The required amounts of investment in fixed assets and working capital.

c. The opportunity cost of capital. Note you can also vary the opportunity cost of capital in Table 19.1 .

d. Profitability, that is, cost of goods sold as a percentage of sales.

e. The assumed amount of debt financing.

Visit us at www.mhhe.com/bma Visit us at www.mhhe.com/bma Chapter 19 Financing and Valuation 497 AppendixLO1