Current increase in our market capitalization

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As you are aware, over the past year our stock price has more than doubled, on a riskadjusted basis, with no appreciable change in capital structure or financial performance. You may recall that our last successful product launch was more than five years ago and the market for it has reached saturation, i.e., growth follows GDP growth. Because of the weak economic conditions we have curtailed R&D expenditures over the past four years and we have no successor product in the pipeline. Is there any reason for us to be concerned about the current increase in our market capitalization?

Be sure to frame your response using the discounted cash flow model as a starting point for your analysis. The maximum length of your report should not exceed two pages

Reference no: EM13995005

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