Info

2.60%

Using this information, a. Estimate the duration of this firm's projects. How would you use this information in designing the debt issue?

b. How cyclical is this company? How would that affect your debt issue?

c. Estimate the sensitivity of firm value to exchange rates. How would you use this information in designing the debt issue?

d. How sensitive is firm value to inflation rates? How would you use this information in designing the debt issue?

e. What factors might lead you to override the results of this analysis?

8. Repeat the analysis in problem 7 for a private firm that has provided you with the following estimates of operating income for the ten years for which you have the macro economic data:

Year

Operating Income

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