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You find three comparable firms quoting at the New York Stock Exchange (NYSE) operating in...

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You find three comparable firms quoting at the New York Stock Exchange (NYSE) operating in the same industry group as Youx. You have the following data on these firms: Equity Beta Market Leverage Ratio Market Capitalization (in millions) Zen 2.75 30% 200 Lynx 1.60 20% TopTech 2.00 10% 200 200 You know that all three comparable firms have investment grade credit ratings. The historical market risk premium is 6%. The current US treasury 20-year bond rate is 3%. The current US treasury 1-year bond rate is 2%. The CEO of Youx expects the cash-flows of the firm to grow at 5% in the foreseeable future. The marginal corporate tax rate is 34%. You engage in the valuation of Youx for the sake of writing a report to be delivered to Lucent Technologies

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