Corporate Finance I
IDX Technology is a privately held developer of advanced security systems. As part of your business development strategy, in late 2008 you initiate discussions with IDX’s founder about the possibility of acquiring the business at the end of 2008. Estimate the value of IDX per share using the discounted FCF approach and the following data:
The value of IDX per share is computed as shown below:
The enterprise value in 2009 is computed as follows:
= Expected FCF in 2010 / ( WACC - growth rate )
= $ 50 million / ( 0.094 - 0.05 )
= $ 1,136,363,636
Enterprise value in 2008 is computed as follows:
= ( $ 1,136,363,636 + $ 45,000,000 ) / 1.094
= $ 1,079,857,071
Now we shall adjust cash and debt as shown below:
= $ 1,079,857,071 + $ 110,000,000 - $ 30,000,000
= $ 1,159,857,071
Now finally we shall divide the above number by the number of shares as
= $ 1,159,857,071 / 50,000,000
= $ 23.20 per share Approximately
Feel free to ask in case of any query relating to this question
Corporate Finance I IDX Technology is a privately held developer of advanced security systems. As part...
IDX Technologies is a privately held developer of advanced security systems based in Chicago. As part of your business development strategy, in late 2013 you initiate discussions with IDX's founder about the possibility of acquiring the business at the end of 2013. Estimate the value of IDX per share using a discounted FCF approach and the following data: • Debt: $22 million • Excess cash: $105 million Shares outstanding: 50 million • Expected FCF in 2014: $43 million • Expected...
IDX Technologies is a privately held developer of advanced security systems based in Chicago. As part of your business development strategy, in late 2013 you initiate discussions with IDX's founder about the possibility of acquiring the business at the end of 2013. Estimate the value of IDX per share using a discounted FCF approach and the following data: • Debt: $40 million • Excess cash: S120 million • Shares outstanding: 50 million • Expected FCF in 2014: $45 million •...
IDX Technologies is a privately held developer of advanced security systems based in Chicago. As part of your business development strategy, in late 2013 you initiate discussions with IDX's founder about the possibility of acquiring the business at the end of 2013. Estimate the value of IDX per share using a discounted FCF approach and the following data: bullet Debt: $ 21 million bullet Excess cash: $ 102 million bullet Shares outstanding: 50 million bullet Expected FCF in 2014: $...
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