Computation of enterprise value and stock price

Assignment Help Finance Basics
Reference no: EM1312694

Computation of enterprise value and stock price

Rock Hard Corp expects the following free cash flows in millions over the next 5 years

1 150

2 200

3 180

4 210

5 300

After the fifth year, free cash flows are expected to grow at 5% per year. Using the discounted free cash flow model and a weighted average cost of capital if 15%

1. Estimate the enterprise value of Rock Hard

2. Rock hard has excess $cash of 20 million, debt of $550 million, and 80 million shares outstanding, estimate its stock price.

Reference no: EM1312694

Questions Cloud

Calculation of salary payable net taxes : Calculation of Salary payable net Taxes - Calculate Gross Pay and Net pay for employee #12's weekly pay.
Aggregate effective demand and full employment level : According to the neo-classical economic theory, the market is a natural, self-regulating system that tends automatically towards the full employment equilibrium of supply and demand.
Calculate the final & resultant velocity and acceleration : A ballplayer catches a ball 2.75 seconds after throwing it vertically upward. With what speed did he throw it? Calculate the final & resultant velocity and acceleration.
Inverse probability based on the normal distribution : What IQ score should one have in order to be eligible for Mensa?
Computation of enterprise value and stock price : Computation of enterprise value and stock price and Estimate the enterprise value of Rock Hard
Effect of change in tastes on equilibrium level : Suppose that American households change their tastes such that they want to save more at every level of income.
Discount on bills payable : Descriptive Questions - Discount on Bills payable - ABC Company just announced a 4 for 1 stock split. Evaluate the effect
Probability values based on the normal distribution : What is the probability that a visually impaired student gets less than 6.9 hours of sleep?
Effect of an increase in risk aversion on money market : Suppose there is an increase in risk aversion by wealth holders in the sense that, other things equal, they want to hold more of their wealth in money (bank deposits) and less in securities.

Reviews

Write a Review

 

Finance Basics Questions & Answers

  What is goal for a business and write a well-organized essay

Determination of goal for a business and write a well-organized essay identifying the main premise of the book

  Computation of leverage ratio and average cost of capital

Computation of Leverage Ratio and Average Cost of Capital and What discount rate should you apply to your subject property in your DCF valuation

  Compute of after-tax profit

Compute of after-tax profit and The corporate tax rate is 40%. If the economy is strong the firm will sell 2,000,000 gadgets

  Computing expected return on equity with capital structure

Backwards has $364 million of debt outstanding at the interest rate of 11% and $674 million of equity (market value) outstanding. Compute expected return on equity with this capital structure?

  Describing non-value maximizing mergers in finance world

Describe how Agency problems can lead to non-value maximizing mergers in finance world.

  Computation of current value of shares of a stock

computation of current value of shares of a stock under given dividend growth rate and This growth rate is expected to continue for the foreseeable future

  Determining the maximum price and current yield

Rate of return on this investment (YTM), determine the maximum price that you must be eager to pay for this bond? Solve for PV.

  The demand for milk is more elastic than demand for water

The demand for milk is more elastic than the demand for water. Assume the government levies an equivalent tax on milk also water.

  Evaluate abc cost of equity capital by using the market risk

Evaluate ABC cost of equity capital by using the market risk premium of 3.5%. What is firm's WACC under each of 2 suppositions about market risk premium.

  Illustrate how book value each share

Illustrate how book value each share, earning each share also dividends each share change over years.

  What is the present value of your equity holdings

What is the present value of your equity holdings under the scenario where the firm plans to borrow $150K in the third year? How does this differ from your answer to a)? How does your answer contrast with the answer in Question 5? Explain the differe..

  Computing the cost in ten years using average home costs

The average home costs= $275,000 today. How much will it cost in ten years if price rises by 5% each year?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd