Calculate datametrix enterprise value as of the end of 2010

Assignment Help Finance Basics
Reference no: EM131127059

The Datametrix Corporation has been in operation for one full year (2010). Financial statements are shown below. Sales are expected to grow at a 30 percent annual rate for each of the next three years (2011, 2012, and 2013) before settling down to a long-run growth rate of 7 percent annually. The cost of goods sold is expected to vary with sales. Operating expenses are expected to grow at 75 percent of the sales growth rate (i.e., be semifixed) for the next three years before again growing at the same rate as sales beginning in 2014. Interest expense is expected to grow with sales. Depreciation can be forecasted either as a percentage of sales or as a percentage of net fixed assets (since net fixed assets are expected to grow at the same rate as sales growth). Individual asset accounts are expected to grow at the same rate as sales. Accounts payable and accrued liabilities are also expected to grow with sales.

Because Datametrix is in its startup stage, management and venture investors believe that 35 percent is an appropriate weighted average cost of capital (WACC) discount rate until the firm reaches its long-run or perpetuity growth rate. At that time, it will have survived, recapitalized its capital structure, and become a more typical firm in the industry with an estimated WACC of 18 percent. Calculate Datametrix's enterprise value as of the end of 2010. Also indicate what the equity would beworth.

2422_a.jpg

Reference no: EM131127059

Questions Cloud

When seller breaches contract for the sale of goods : When the seller breaches a contract for the sale of goods to a buyer, the buyer is entitled to specific performance of the contract if: a goods are unique b, market cost of the goods has increased c. goods can be purchased in any major city in the co..
Significant european work and life balance practice : Select a significant European work / life balance practice that U.S. companies could most easily implement. Provide a specific scenario or example to support your response
Supply manager to recognize his responsibilities to supplier : Both the buyer and the firm he/she represents are judged by the manner in which they conduct business. In this global market, it is more important than ever for the supply manager to recognize his responsibilities to the supplier, his organization, a..
What percentage of an initial sample of 131i remains : What percentage of an initial sample of 131I remains after 20.0 days?
Calculate datametrix enterprise value as of the end of 2010 : At that time, it will have survived, recapitalized its capital structure, and become a more typical firm in the industry with an estimated WACC of 18 percent. Calculate Datametrix's enterprise value as of the end of 2010. Also indicate what the equit..
Shows proportions of computer salespeople : The accompanying table shows proportions of computer salespeople classified according to marital status and whether they left their jobs or stayed over a period of 1 year
Combatting global warming is the free rider problem : Another often-cited roadblock to combatting global warming is the free rider problem. Reducing global warming requires a coordinated effort among all countries. But countries generally have little leverage to convince other countries to behave in a m..
Describe the alternative system development methodologies : Describe a business organization for which you are proposing design of an information system. Perform a brief research on similar existing systems and provide their background information. Some areas to investigate and report in the research inclu..
Which space vehicle did yuri gagarin board for first time : Who was the first woman in space? Which Space vehicle did Yuri Gagarin Board for the first time

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd