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Bandit Corporation has 10M shares outstanding and 25M in debt and 5M in excess cash at the end of 2012. Free cash flows for Bandit Corporation were $12M in 2012. You estimate that these will grow to $14M next year in 2013 and then grow at 4% in perpetuity. Bandit’s cost of equity is 10% and its WACC is 9%. Bandit has a share price at end of 2012 of:
a. $21.33
b. $22.00
c. $25.50
d. $26.00
e. $28.00
Given the following information for the stock of Foster Company, calculate the risk premium on its common stock.
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The Money Markets are primarily for
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