Information relating to gamma systems


Assume that some of the information relating to Gamma Systems Manufacturing Corporation has changed. Answer the following questions using the financial statement data in Problem 5.

A. How would your valuation estimate change if the sales growth rate had been 6 percent but the discount rate had been 20 percent?

B. How would your valuation estimate change if the sales growth rate had been 5 percent and the discount rate 18 percent?

C. How would your valuation estimate change if the perpetuity growth rate had been 7 percent and the discount rate 20 percent?

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Finance Basics: Information relating to gamma systems
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