Icarus Airlines is proposing to go public, and you have been given the task of...
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Icarus 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 40% of the companys present value, and you believe that at this capital structure the companys debtholders will demand a return of 6% and stockholders will require 13%. The company is forecasting that next years operating cash flow (depreciation plus profit after tax at 21%) will be $78 million and that investment in
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