You have been just hired as CEO of Bitter Inc., a conglomerate that operates in three businesses. The details of the bus

[answerhappygod]

You have been just hired as CEO of Bitter Inc., a conglomerate
that operates in
three businesses. The details of the businesses are provided
below:
Entertainment
Movie Theaters
Travel Services
Company
Revenues
$450
$400
$325
$1,175
Operating Income (next year)
$200
$85
$95
$380
Effective tax rate
36%
20%
36%
32.42%
After-tax Operating Income (next year)
$128
$68
$61
$257
Invested Capital
$525
$375
$125
$1,025
Expected Growth Rate
3.50%
3.50%
3.50%
3.50%
Cost of capital
11.00%
9.25%
8.00%
10.25%
a. What is the value of the consolidated company, using the
combined company’s cash flows and cost of capital?
b. What is the value of Bitter as the sum of its parts, using the
divisional cash flows and the industry average cost of capital for
each division?
c. If you are getting a different value for Bitter in part b, where
is the difference coming from?