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You are thinking of acquiring a company that is not listed on the stock exchange. You expect that the company will have sales of 5
You are thinking of acquiring a company that is not listed on the stock exchange.
You expect that the company will have sales of m at cost of goods sold for the next year The fixed costs of the company amount to and depreciation to
annually. The tax rate is the same as that of the industry. The company
annually invests in fixed assets and in working capital. The capital structure
of the business is loans, equity and is not expected to change in the future.
You estimate that the Free Cash Flows of the company will grow at a rate of per year in perpetuity. The medium beta of the industry is with an average debtequity ratio of The year riskfree rate is
and the annual expected market return is The borrowing interest rate of the company is Calculate the value of the business.
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