Intro It Is December 2022 You Work As A Financial Analyst For Merck Co And Are Tasked With The Due Diligence On The 1 (53.25 KiB) Viewed 42 times
Intro It Is December 2022 You Work As A Financial Analyst For Merck Co And Are Tasked With The Due Diligence On The 2 (23.54 KiB) Viewed 42 times
Intro It is December 2022. You work as a financial analyst for Merck & Co. and are tasked with the due diligence on the proposed acquisition of a biotech startup. You estimated the following cash flows for the startup: Expected free cash flow Year ($ million) (end of year) 2023 72.5 2024 108.75 2025 141.38 2026 169.65 2027 186.62 After 2027, cash flows are expected to grow by 3% per year. Based on the riskiness of your industry, you think that your weighted average cost of capital is 13%. The biotech firm has 5 million shares and bonds worth $120 million outstanding. Part 1 Attempt 1/10 for 9 pts. What is the horizon value, i.e., the present value of all free cash flows from 2028 to infinity expressed in 2027-dollars (in $ million)? 0+ decimals Submit Part 2 Attempt 1/10 for 9 pts. What is the total value of the company (in $ million)? 0+ decimals Submit
Attempt 1/10 for 9 pts. Part 3 What is the price per share of common stock (in $)? Assume the company has no excess cash. 0+ decimals Submit
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