Read the case study and use the Excel file, to answer these questions: Liedtke’s

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Read the case study and use the Excel file, to answer these questions:
Liedtke’s

Read the case study and use the Excel file, to answer these questions:
Liedtke’s Projections
1. Estimate the value of Mercury using a discounted cash flow approach using Liedtke’s base case projections. Following the steps listed below. Make necessary additional assumptions and be prepared to defend them. 
a.) What is the weighted average cost of capital? Should it be based on Mercury’s own cost of capital or AGI’s?
b.) Estimate the free cash flows from 2007 to 2011.
c.) Develop an estimate for terminal value in 2011. Choose your method (stable growth, multiples, or/and liquidation value) and explain.
d.) What should be the maximum price AGI is willing to pay to acquire Mercury based on your estimates from (a) to (c)?
2. Review the projections formulated by Liedtke. Are they appropriate? If not, how would you recommend modifying them? How would your modification (if any) change the maximum price AGI is willing to pay for Mercury?

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