PhoneCo, a U.S. maker of smart phones and other consumer products, has $60 billion of...
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PhoneCo, a U.S. maker of smart phones and other consumer products, has $60 billion of cash and marketable securities on its balance sheet and revenues of $50 billion. Using the rule of thumb mentioned in the text, how much would you estimate as cash needed for operations and excess cash and marketable securities? Now suppose you discover that $40 billion of the $6o billion in cash is from profits earned overseas. Would your estimate of the value of excess cash and marketable securities change? How does this affect your valuation of PhoneCo
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