Estimate the fcff for the most recent financial year

Assignment Help Finance Basics
Reference no: EM13892564

Company XYZ reported net income of $770 million after interest expenses of $320 million in a recent financial year. (The corporate tax rate was 36 percent.) It reported depreciation of $960 million in that year, and capital spending was $1.2 billion. The company also had $4 billion in debt outstanding on the books, was rated AA (carrying a yield to maturity of 8%), and was trading at par (up from $3.8 billion at the end of the previous year). The beta of the stock is 1.05, and there were 200 million shares outstanding (trading at $60 per share), with a book value of $5 billion. Company XYZ paid 40% of its earnings as dividends and working capital requirements are negligible. (The Treasury bond rate is 7%)

a. Estimate the FCFF for the most recent financial year.

b. Estimate the value of the company now.

c. Estimate the value of equity and the value per share now.

Reference no: EM13892564

Questions Cloud

Explanation of the primary parts of selected organization : Post an explanation of the primary parts of your selected organization. Then, explain how the parts of this organization relate to the whole organization. Finally, explain how understanding the whole and its parts informs an organization's leaders..
Professionals to understand legal issues in contracts : Why is it important for purchasing professionals to understand legal issues in contracts
Examine the leading health indicators : Examine the Leading Health Indicators. Determine the average life expectancy at birth for each country. Did the information you found surprise you? If so, why?
Determine the ending balance of each t account : Use the letters beside each transaction to identify entries. After recording the transactions, post them to Taccounts, which serves as the general ledger for this assignment..
Estimate the fcff for the most recent financial year : Estimate the FCFF for the most recent financial year. Estimate the value of the company now. Estimate the value of equity and the value per share now.
What factors shift as and ad curves? : What factors shift AS and AD curves?
Describe the logic behind a field of study : Describe the logic behind a field of study that is not covered in the text book. Answer questions about the elements of thought (assumptions, problems, point of view, etc.) for the subjectSubject is Critical Thinking , Book is Critical Thinking, Tool..
Strategic controls, and contingency plans : Implementation, Strategic Controls, and Contingency Plans - Assessment Activity - Week5 - STR/581 - eCampusWrite a draft of no more than 1,800 words of the strategic plan for your organization, including the following: My organization, company is-  E..
What effect of two payment mechanism on provider behaviour : What is the effect of two payment mechanism (fee-for-service and capitation) on provider behaviour and What is the impact of deductibles and co-payments on patients' health seeking behaviour?

Reviews

Write a Review

Finance Basics Questions & Answers

  A couple borrows 200000 for a mortgage that requires fixed

a couple borrows 200000 for a mortgage that requires fixed monthly payments over 30 consecutive years. the first

  Extreme value theory evt provides valuable insight about

extreme value theory evt provides valuable insight about the tails of return distributions. which of the following

  Zap corporation has always been an s corporation and is 100

1.xyz has been an s corporation since its inception six years ago. on january 1 of the current year the corporations

  Is burt beess pricing strategy sustainable

Has Burt's Bees's executed value-based pricing, cost-based pricing or competition based pricing? Explain.

  What is the sustainable growth rate

Last year Lakesha's Lounge Furniture Corporation had an ROE of 12.5% and a dividend payout ratio of 20%. What is the sustainable growth rate? (Round your answer to 2 decimal places. Omit the "%" sign in your response.)

  Computation of the value of the annuity payment

Computation of the value of the annuity payment and would you have to deposit each year if your first deposit is made now and the final deposit is made one year

  What is the yield to maturity on these bonds

Rockinghouse Corp. plans to issue seven-year zero coupon bonds. It has learned that these bonds will sell today at a price of $475.03. Assuming annual coupon payments, what is the yield to maturity on these bonds?

  What is the appropriate discount factor

How much importance should be given to the energy cost situation and what are the project's cash flows for the next twenty years? What assumptions did you use?

  The firm has decided on capital structure consisting

as a financial consultant you have contracted with wheel industries to evaluate their procedures involving the

  What is the foreign exchange risk

What is the foreign exchange risk? What is the difference between balance sheet exposure and transaction exposure? Can you provide an example?

  During this tax year company is liable to pay tax 35

xyz a telecom company has the following capital structurewhich is considered to be optimaldebentures 20preferred stock

  Which of these features benefits small shareholders

Which of these features benefits small shareholders?

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