If the discount rate were 14%, how much should Amazon pay for the company today, at most, if it has a ten-year time horizon? Up to what price would Amazon be willing to bid if its minimum IRR were 10%? Year Free CAsh Flow EBIDTA NET Profit Net Financial Debt 2019 -25 5 807 96 2020 -81 8 1542 101 2021 32 62 1876 139 2022 36 85 919 125 2023 58 143 2355 117

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 14P
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  • If the discount rate were 14%, how much should Amazon pay for the company today, at most, if it has a ten-year time horizon?
  • Up to what price would Amazon be willing to bid if its minimum IRR were 10%?
Year Free CAsh Flow EBIDTA NET Profit Net Financial Debt
2019 -25 5 807 96
2020 -81 8 1542 101
2021 32 62 1876 139
2022 36 85 919 125
2023 58 143 2355 117

 

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