Homework Help is Here – Start Your Trial Now!
Business
Finance
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 about IDX: • Debt: $30 million • Excess cash: $110 million Shares outstanding: 50 million Expected FCF in 2009: $45 million Expected FCF in 2010: $50 million Future FCF growth rate beyond 2010: 5% Weighted-average cost of capital: 9.4%

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 about IDX: • Debt: $30 million • Excess cash: $110 million Shares outstanding: 50 million Expected FCF in 2009: $45 million Expected FCF in 2010: $50 million Future FCF growth rate beyond 2010: 5% Weighted-average cost of capital: 9.4%

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
See similar textbooks
icon
Related questions
Question

Hi,

I'm unsure how to solve this question without using Excel

Thanks

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 about IDX: • Debt: $30 million Excess cash: $110 million Shares outstanding: 50 million Expected FCF in 2009: $45 million Expected FCF in 2010: $50 million Future FCF growth rate beyond 2010: 5% Weighted-average cost of capital: 9.4%
Transcribed Image Text: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 about IDX: • Debt: $30 million Excess cash: $110 million Shares outstanding: 50 million Expected FCF in 2009: $45 million Expected FCF in 2010: $50 million Future FCF growth rate beyond 2010: 5% Weighted-average cost of capital: 9.4%
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS