Case 15 Scope City, Incorporated (A)

Answer Questions

1. Describe the company core business and the market it serves?
2. What are the company average annual rates of growth for SCI revenue and net income? How should the firm analyze the value of the potential acquisition in the light these number?
3. What SCI historial cost of equity?
4. What a SCI historical cost long-term debt?
5. How do the firm current liabilities influence the cost of capital calculation?
6. Using your answer for 3, 4 above, determine SCI historical weighted-averaged cost of capital (WACC).
7. How should the presentation for the investors' conference discuss the firm growth and historical? How are historical cost of capital? How are historical cost relevant when discussing future investment?
8. What other informATION should Ruby Damodaran have on hand for her presentation to the conference? Additionally, what type of questions will investor likely ask for SCI? How will new investors impact SCI choices of capital and strategy in the future?