What is orange trees intrinsic value of equity

Assignment Help Financial Management

Reference no: EM131313262

OrangeTree Corporation’s value of operations is estimated to be $550 million. OrangeTree has $100 million in debt (it has no preferred stock) and 10 million shares of common stock outstanding. Suppose OrangeTree has decided to distribute $50 million, which it presently is holding in very liquid short-term investments.

a. Assume that OrangeTree has not yet made the distribution. What is OrangeTree’s intrinsic value of equity? What is its intrinsic per share stock price?

b. Now, suppose that OrangeTree has just made the $50 million distribution in the form of dividends. What is OrangeTree’s intrinsic per share stock price after this dividend payment?

Reference no: EM131313262

Questions Cloud

What are differences between future value and present value : What are the differences between simple interest and compound interest? With regards to money: What are the differences between future value and present value? What considerations do you need to take when considering "time value of money"? Why is the..

Which of porters five forces seem to stronger : Identify an industry in which many competitors seem to be having financial performance problems - Which of Porter's 5 Forces seem to stronger? How have these 5 forces impacted industry and company profitability?

How can we break down the valuation of a deferred annuity : Which has the highest present value if the payments and number of payments are identical, an ordinary annuity or an annuity due?

Accurate predictions about company financial condition : Then, imagine you are an investor or creditor; suggest the ratios that you believe would provide an investor or creditor with the most important information needed to make accurate predictions about the company's financial condition. When analyzin..

What is orange trees intrinsic value of equity : OrangeTree Corporation’s value of operations is estimated to be $550 million. Orange Tree has $100 million in debt (it has no preferred stock) and 10 million shares of common stock outstanding. Assume that OrangeTree has not yet made the distribution..

Bit array implementation : Both implementations should use the same sets. Using the Timing class, compare the major operations (union, intersection, difference, and subset) of each implementation and report the actual difference in times.

Valuate current or future applications of biotechnology : Write a paper which includes the following: Evaluate current or future applications of biotechnology in the fields of medicine or agriculture

Relationship between the ear and the apr : As the frequency of compounding increases within the annual period, what happens to the relationship between the EAR and the APR?

Explain how a quarter-wave transformer works : Explain why a complete revolution (360 degrees) around the Smith chart represents a distance of λ/2 on the transmission line - Explain how a quarter-wave transformer works to achieve load matching.

User Account

All Pages