What is minimum price that Rex shareholders accept

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Question - Rex has constructed the following estimates of its future cash flows which it has made available to shareholders.

Year

Capital Expenditures ($000's)

Profits after Tax ($000's)

Depreciation ($000's)

1

20

25

7

2

25

30

8

3

15

35

10

4

14

40

11

Each year beyond 4

14

45

12

The cost of capital to Rex Ltd is 8%. Using this information and any other in the question you believe appropriate, what is the minimum price that Rex shareholders are likely to accept in exchange for the assets and liabilities of the company?

Reference no: EM133100216

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