Question
In: Finance
A petition for the reorganization of the Boniface Company has been filed under the Insolvency Act....
A petition for the reorganization of the Boniface Company has been filed under the Insolvency Act. The trustees estimate the firm's liquidation value, after considering costs, is $140 million. Alternatively, the trustees, using the analysis of the Zulu Consulting firm, predict that the reorganized business will generate $18 million annual cash flows in perpetuity. The discount rate is 11%.
Calculate the present value if the company is alive. (Enter the answer in millions. Round the final answer to 2 decimal places. Omit $ sign in your response.)
PV $ ________?
Solutions
Expert Solution
Present value of annual cashflows = Annual Cashflow / Discount rate
Present value of annual cashflows = $18,000,000 / 11%
Present value of annual cashflows = $163,636,363.60
jeff jeffy answered 2 years agoRelated Solutions
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