Estimated value of operations

Assignment Help Financial Management
Reference no: EM131063253

EMC Corporation has never paid a dividend. Its current free cash flow of $510,000 is expected to grow at a constant rate of 4%. The weighted average cost of capital is WACC = 10%. Calculate EMC's estimated value of operations. Round your answer to the nearest dollar.

Reference no: EM131063253

Questions Cloud

Develop different analogies to help with the explanation : Devise a presentation that explains and contrasts these two theories, and develop different analogies to help with the explanation.
How much competitive private market provide : How much public television would a competitive private market provide?
Problem regarding the strategic leadership : Explain the importance of strategic leadership and methods to a health care organization. Describe methods a leader may use to align the mission, vision, and goals of individual stakeholders to the mission, vision, goals, and objectives of the org..
What is the probability one of minority candidates is hired : A large company must hire a new president. The Board of Directors prepares a list of five candidates, all of whom are equally qualified. What is the probability one of the minority candidates is hired
Estimated value of operations : EMC Corporation has never paid a dividend. Its current free cash flow of $510,000 is expected to grow at a constant rate of 4%. The weighted average cost of capital is WACC = 10%. Calculate EMC's estimated value of operations.
Before-tax component cost of debt : Oberon, Inc., has a $15 million (face value) 8-year bond issue selling for 95 percent of par that pays an annual coupon of 7.95 percent. What would be Oberon’s before-tax component cost of debt?
Show that there is an arbitrage opportunity : Suppose BJ's stock price is currently $50 and a dividend of $2 is expected in two months. A six-month European call option on the stock with exercise price of $48 is selling for $5. A six-month European put option on the stock with exercise price of ..
Competitive strategies organizations : Describe competitive advantage and the competitive strategies organizations use to get it. Please reference
What is your estimate of the stock current price : A company currently pays a dividend of $1.5 per share (D0 = $1.5). It is estimated that the company's dividend will grow at a rate of 22% per year for the next 2 years, then at a constant rate of 7% thereafter. What is your estimate of the stock's cu..

Reviews

Write a Review

Financial Management Questions & Answers

  Risk-free rate of return-what is the expected return

The beta of M Simon Inc., stock is 1.4, whereas the risk-free rate of return is 0.06. If the expected return on the market is 0.16, then what is the expected return on M Simon Inc?

  Transformation of primary securities into secondary claims

What are the economic functions that financial intermediaries perform that benefit society? Be sure to explain how depository intermediaries, like banks, differ from other financial institutions such as investment banking firms or securities brokerag..

  How will reverse innovation impact the marketplace

How will reverse innovation impact the U.S. marketplace? What specific products and companies do you expect to see impacted by this trend?

  Explain the cash payback technique

Explain the cash payback technique. Be sure to include the formula used to calculate the cash payback period and explain how the calculated period is evaluated.

  Statements is true regarding sprints stock

A linear regression was done to estimate the relation between Spint's stock returns and the market's return. The intercept of the line was found to be 0.23 and the slope was 1.47. Which of the following statements is true regarding Sprint's stock?

  Considering purchasing new machine

Builtrite is considering purchasing a new machine that would cost $60,000 and the machine would be depreciated (straight line) down to $0 over its five year life. At the end of five years it is believed that the machine could be sold for $15,000. The..

  What is the amount of the monthly payments

A commercial bank will loan you $55,480 for 7 years to buy a car. The loan must be repaid in equal monthly payments at the end of the month. The annual interest rate on the loan is 14.20 percent of the unpaid balance. What is the amount of the monthl..

  Make semiannual payments and are priced at par value

Both Bond Sam and Bond Dave have 9 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has six years to maturity, whereas Bond Dave has 17 years to maturity

  What will price be immediately after next dividend payment

The C. Alice Stone Company's common stock has paid a $3 dividend for so long that investors are now convinced that stock will continue to pay that annual dividend forever. If the next dividend is due in one year and investors require 8% return on the..

  Compute the price of bonds based on semiannual analysis

Heather Smith is considering a bond investment in Locklear Airlines. The $1,000 par value bonds have a quoted annual interest rate of 11 percent and the interest is paid semiannually. The yield to maturity on the bonds is 14 percent annual interest. ..

  Analysis report show with respect to net sales revenue

The following is summary of information presented on the financial statements of a company on December 31, 2015. Account 2015 2014 Net Sales Revenue $600,000 $500,000 Cost of Goods Sold 450,000 400,000 Gross Profit $150,000 $100,000 What would a hori..

  Identify all pure strategy nash equilibrium

Assume that the demand for chalk is P = 8 -0.1, where P is the market price and Q is the total market output measured in thousands of boxes of chalk. Construct a payoff table for this game, using profits per firm as the payoffs. Identify all pure str..

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