Problem 4 (6 points) IDX Technologies is a privately held developer of advanced security systems...
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Problem 4 (6 points) IDX Technologies is a privately held developer of advanced security systems based in Chicago. As part of your business development strategy, in late 2008 you initiate discussions with IDX's founder about the possibility of acquiring the business at the end of 2008. Estimate the value of IDX per share using a discounted FCF approach and the following data: Debt: $38 million Excess cash: $118 million Shares outstanding: 50 million Expected FCF in 2009: $46 million Expected FCF in 2010: $57 million Future FCF growth rate beyond 2010: 4% Weighted-average cost of capital: 9.4% hare
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