- +44 141 628 6080
- info@tutorsglobe.com

What is the total value of icarus

Problem: Ircarus Airlines is proposing to go public and you have been given the task of estimating the value of its equity. Management plans to maintain debt at 30 percent of the company's present value, and you believe that at this capital structure the company's debtholders will demand a return of 6 percent and stockholders will require 11 percent. The company is forecasting that next year's operating cash flow (depreciation plus profit after tax at 40 percent) will be $68 million and that investment expenditures will be 30 million. Thereafter, operating cash flows and investment expenditures are forecast to grow by 4 percent a year.

A. What is the total value of Icarus?

B. What is the value of the company's equity?

Now Priced at $20 (50% Discount)

Recommended **(96%)**

1953362

Questions

Asked

3,689

Active Tutors

1412354

Questions

Answered

**
Start Excelling in your courses, Ask a tutor for help and get answers for your problems !! **

©TutorsGlobe All rights reserved 2022-2023.

## Q : Determine the proposals internal rate of return

Using a required rate of return of 16%, determine the net present value of the investment proposal. Determine the proposal's internal rate of return.