Answered step by step
Verified Expert Solution
Question
1 Approved Answer
1 You are trying to price a young software company and have the following numbers on the company projected for 6 years from now (at
1
You are trying to price a young software company and have the following numbers on the company projected for 6 years from now (at t=6 ), and all values are in "thousand" Dollars: Revennes: S1000; EBITDA: \$80; Debt Outstanding: $500 Expected growth rate in revenues: 15% You bave a regression of EVIEBITDA ratios against expected growth rates across software companies (with growth rates entered in decimals, i.e., 10% should be entered as 0.10 ): EVIEBITDA =12.00+50.00( Expected growth rate in revenues ) Using this regression, estimate the value of equity for the company today, assuming that the company is expected to have a cost of equity of 20% for the next 3 years, and 10% for thereafter Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started