As discussed in the previous question, the United Kingdom telecommunications company BT Group plc paid ( 12.5)

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As discussed in the previous question, the United Kingdom telecommunications company BT Group plc paid \(£ 12.5\) billion to acquire the telecommunications company EE Limited in January 2016. EE had reported earnings before interest, taxes, depreciation, and amortization of \(£ 1,781\) million for 2015. Assuming that EE can maintain this earnings flow indefinitely, would it have been worthwhile for BT to acquire it if the real interest rate was \(7 \%\) ? Why?

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Microeconomics

ISBN: 9781292215624

8th Global Edition

Authors: Jeffrey Perloff

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