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What is the appropriate discount rate to value

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Reference no: EM132179278

Assignment -

1. Read the case in its entirety. Pharmacyclics: Financing Research & Development

2. Submit a Word document with the following:

a. A summary of the case study (i.e., who are the important players in the case, and what is the main problem?)

b. Proposed solutions to the case (i.e., what solution(s) do you propose?)

Please answer the following questions:

Why is Pharmacyclics considering an equity issue in March 2000? Why $60 million? What factors should Dr. Richard Miller consider in deciding whether to raise equity?

a. What funding strategy is apparent in PCYC's pre-IPO financing? Why would the managers of PCYC want to follow this strategy? Would its investors also want PCYC to follow this strategy?

b. What is the appropriate discount rate to value the after-tax cash flows following approval in 2002? Is that rate appropriate prior to approval?

c. What is the appropriate terminal value?

d. What is the value of PCYC? What is your estimate of value per share?

Reference no: EM132179278

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