Cost of capital for the division

Assignment Help Accounting Basics

Reference no: EM13963254

Time Warner is considering a sale of its publishing division. The division had earnings EBITDA of $550 million in the most recent year (depreciation was $150 million), growing at an estimated 5 percent a year (you can assume that depreciation grows at the same rate). The return on capital in the division is 15 percent, and the corporate tax rate is 40 percent. If the cost of capital for the division is 9 percent, estimate the following:

a. Value/FCFF multiple.

b. Value/EBIT multiple.

c. Value/EBITDA multiple.

Reference no: EM13963254

Questions Cloud

Write review about involving security policies and planning : Write review about involving security policies, planning, and implementation to include multilevel security processes. Add 2 pages of information to your previously submitted updated outline.

What angle should the boad head : A ferryboat sails between two towns directly opposite each other on a river. if the boat sails at 15 km/h relative to the water, and if the current flows at 6.3 km/h, at what angle should the boad head?

How incident response protocols will mitigate the threats : Justify how the incident response protocols will mitigate the threats to and vulnerabilities of the organization. Support your justification with information assurance research and best practices

Speech on role of students in nation building : Speech on role of students in nation building

Cost of capital for the division : The return on capital in the division is 15 percent, and the corporate tax rate is 40 percent. If the cost of capital for the division is 9 percent, estimate the following:

Write the function definition as a recursive search : Write the function definition as a recursive search, assuming a linked list implementation. After you have corrected the function, trace the execution of NumPaths with n = 4 by hand. Why is this algorithm inefficient?

Relative details of the firms in the drugstore industry : You have been asked to assess whether Walgreen, a drugstore chain, is correctly priced relative to its competitors in the drugstore industry. The following are the price/sales ratios, profit margins, and other relative details of the firms in the ..

Find the rrns voltage across the capacitor. : Find the time averaged output power of the generator in this circuit.

Explain why the bullet acquires a high velocity : When the spring is released, the rod pushes against one cart with a given force. This cart pushes back with an equal force. Explain why this means that the total force on the system of the two carts is zero.

User Account

All Pages