=1/Megabyte plc is a high-tech company experiencing transitional problems. To get through this difficult period, management has

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=1/Megabyte plc is a high-tech company experiencing transitional problems. To get through this difficult period, management has decided on a €120m recapitalisation. In five years’

time, the company should make net profits of €21m, and be valued at 30 times its profits.

Assume that the discount rate is 25% and that there will be no cash flows generated for five years.

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Corporate Finance Theory And Practice

ISBN: 9781118849330

4th Edition

Authors: Pierre Vernimmen, Pascal Quiry, Maurizio Dallocchio, Yann Le Fur, Antonio Salvi

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