ery_1092976_1p1?refresh=61FA5D6D company is publicly traded, so you're able to see that the market is valuing the company at $400 million (considering the stock price, the number of shares, and accounting for debt and cash). If our bid for the company is more than $ million, you will lose all the synergy value creation. 12. In an attempt to figure out how much you should pay for a house, you perform a valuation. You estimate that the going rent for the house will be $12,000 on an annual basis, which you expect to increase by 3 percent each year. Considering other similarly risky investments, you calculate a 3 discount rate of 13 percent. For the sake of convenience, assume the house will last forever (there's typically not much difference between this and twenty to thirty years of cash flows). The maximum you are willing to pay for this house would be $ (in units and no 1000 separators) 13. When you are valuing a company, the usual methodology is to forecast near-term cashflows based on available information and use the growing perpetuity formula beyond that for the 14. One reason that firms conduct share buybacks instead of paying dividends is because share repurchases may receive favorable treatment compared to payment of dividends. 15. In order to reduce the risk of overpaying for an acquisition, firms need to undertake prudent valuation by, for example, conducting as part of due diligence. Part V. Please answer, following the instructions (please note that some questions have word number limits) 1. Explain briefly, why it is not appropriate to say that the value of a firm can be calculated from the firm's balance sheet by subtracting the sum of all liability items from the sum of all the assets items. (maximum 150 words) SAMSUNG ery_1092976_1p1?refresh=61FA5D6D company is publicly traded, so you're able to see that the market is valuing the company at $400 million (considering the stock price, the number of shares, and accounting for debt and cash). If our bid for the company is more than $ million, you will lose all the synergy value creation. 12. In an attempt to figure out how much you should pay for a house, you perform a valuation. You estimate that the going rent for the house will be $12,000 on an annual basis, which you expect to increase by 3 percent each year. Considering other similarly risky investments, you calculate a 3 discount rate of 13 percent. For the sake of convenience, assume the house will last forever (there's typically not much difference between this and twenty to thirty years of cash flows). The maximum you are willing to pay for this house would be $ (in units and no 1000 separators) 13. When you are valuing a company, the usual methodology is to forecast near-term cashflows based on available information and use the growing perpetuity formula beyond that for the 14. One reason that firms conduct share buybacks instead of paying dividends is because share repurchases may receive favorable treatment compared to payment of dividends. 15. In order to reduce the risk of overpaying for an acquisition, firms need to undertake prudent valuation by, for example, conducting as part of due diligence. Part V. Please answer, following the instructions (please note that some questions have word number limits) 1. Explain briefly, why it is not appropriate to say that the value of a firm can be calculated from the firm's balance sheet by subtracting the sum of all liability items from the sum of all the assets items. (maximum 150 words) SAMSUNG