Valuation sensitivities to changes in growth rates

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1. [Valuation Sensitivities to Changes in Growth Rates and Discount Rates] Assume that some of the information relating to the Gamma Systems Manufacturing Corporation has changed.  Using the financial statement data in Problem 5, answer the following questions.

A. How would your valuation estimate change if the sales growth rate had been 6 percent but the discount rate had been 20 percent?

B. How would your valuation estimate change if the sales growth rate had been 5 percent and the discount rate 18 percent?

C. How would your valuation estimate change if the perpetuity growth rate had been 7 percent and the discount rate 20 percent?

Reference no: EM13560473

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