Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please answer this with an a) b) c) format and do not submit other answers that have been submitted by other chegg members. i will

image text in transcribed
please answer this with an a) b) c) format and do not submit other answers that have been submitted by other chegg members. i will upvote if done correctly.
It January 2021, A fohabet (Google) finaliy closed on its acquitition of Fithit the (FIT) for 57. 15 per share or reughly 52,100 mithion, sfer entouncing the transactien it November 2019. Fithit has sold mone then 100 miltion devices, supporting over 29 mittion active usens glohally. Growth in wraraher is anticipated to be \&. of per anhum throegh 2030 . In 2019 , despite revenues exceeding 51.4 billion. Fibit generated nerative cant flown. With Alphsher's resources and global platform, Fitbit will be able to accelerate innovetice in the nearwaler category, scale finter, and improve efficiencies. Alphabet therefore eapecta cash fows to be a modest 530 million in the following year. Goople's cost of capital is la0ts. 1. Based on the data previded abeve, what grewth rate in cash flows is required to cover the coet of acquisition? Do yoe agree with Google' decition to acquire Fithir? Whyt (thow cafoulations; 10 pointe) [ER=r(CF1/C2)] 2. Using the exhibit below, assess the performance of Fliblt. Does this change your decisian to acquire the company? (ropport ancwwer with financial ratios; 10 points) 3. Based on our case study, what other initiative(s) should Alphabet implemett to adress its main challenge(s) in diversification?. Briefly describe. (10 points)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions