Exam 19: Valuation and Financial Modeling: a Case Study

The amortization expense may be used for ________ but for ________,the Canada Revenue Agency (CRA)requires companies to use Capital Cost Allowance (CCA)as tax version of amortization.

Use the tables for the question(s) below. Pro Forma Income Statement for Ideko, 2005-2010 Pro Forma Balance Sheet for Ideko, 2005-2010 -Assuming that Ideko has a EBITDA multiple of 8.5,then the continuation EV/Sales ratio of Ideko in 2010 is closest to:

Capital Cost Allowance (CCA)reduces firm's ________ but increases firm's ________.

Use the table for the question(s) below. Pro Forma Income Statement for Ideko, 2005-2010 -The amount of net working capital for Ideko in 2008 is closest to:

Use the table for the question(s) below. Ideko Sales and Operating Cost Assumptions -Based upon Ideko's Sales and Operating Cost Assumptions,what production capacity will Ideko require in 2008?

Use the table for the question(s) below. Capital Structure and Unlevered Beta Estimates for Comparable Firms -If the risk-free rate of interest is 6% and the market risk premium has historically averaged 5%,then the cost of capital for Luxottica is closest to:

Use the tables for the question(s) below. Estimated 2005 Income Statement and Balance Sheet Data for Ideko Corporation The following are financial ratios for three comparable companies: -What range for the market value of equity for Ideko is implied by the range of P/E multiples for the comparable firms?

Use the tables for the question(s) below. Pro Forma Income Statement for Ideko, 2005-2010 Pro Forma Balance Sheet for Ideko, 2005-2010 -Assuming that Ideko has a EBITDA multiple of 9.4,then the continuation enterprise value of Ideko in 2010 is closest to:

Use the table for the question(s) below. Capital Structure and Unlevered Beta Estimates for Comparable Firms -The unlevered beta for Luxottica is closest to:

Use the table for the question(s) below. Pro Forma Income Statement for Ideko, 2005-2010 -With the proper changes it is believed that Ideko's credit policies will allow for an account receivables days of 60.The forecasted accounts receivable for Ideko in 2008 is closest to:

Use the table for the question(s) below. Ideko Sales and Operating Cost Assumptions -Based upon Ideko's Sales and Operating Cost Assumptions,what production capacity will Ideko require in 2009?

Use the table for the question(s) below. Capital Structure and Unlevered Beta Estimates for Comparable Firms -The unlevered beta for Nike is closest to: