Covan, inc. is expected to have the following free cashflow: year 1 2 3 4 times times times••• fcf 13 15 16 17 grow by 4% per yeara. covan has 66 million shares outstanding, 33 million in excess cash, and it has no debt. if its cost of capital is 13%, what should be its stock price? b. covan reinvests all its fcf and has no plans to add debt or change its cash holdings (it does not invest its cash holdings). if you plan to sell covan at the beginning of year 2, what is its expected price? c. assume you bought covan stock at the beginning of year 1. what is your expected return from holding covan stock until year2?

What is private equity investing? who participates in it and why? how is palamon positioned in the industry? how does private equity investing compare with public market investing? what are the similarities and differences between the two? why is palamon interested in teamsystem? does it fit with palamon’s investment strategy? how much is 51% of teamsystem’s common equity worth? use both a discounted cash flow and a multiple-based valuation to justify your recommendation. what complexities do cross-border deals introduce? what are the specific risks of this deal? what should louis elson recommend to his partners? is it a go or not? if it is a go, what nonprice terms are important? if it’s not a go, what counterproposal would you make?