Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
ABC’s the most recent free cash flow (FCF0) is $50 million. The free cash flow is expected to grow at a rate of 30 percent, 20 percent, and 10 percent in each of the next three years. After three years, it is expected to grow forever at a constant rate of 5 percent. The cost of common stock (rs) is 15% and the weighted average cost of capital (WACC) is 12%. ABC currently has 100 million common shares of outstanding. Kay’s book value of debt and preferred stock is $20 million and $30 million respectively and the book values of debt and preferred stock are very close to market value of debt and preferred stock. ABC has $10 million marketable securities (beyond normal operation) and $ 5 million of minority investment in another company. Using Excel, calculate ABC’s stock price using FCF based valuation model and using “Two Way Data Table” of the Excel, show the sensitivity of the stock prices to the growth rate and the discount rate. (Use the first year growth rate from 20% to 40% in 2% increment and use a discount rate from 9% to 15% in 1% increment.)
often organizations enter the marketplace with one approach and model. as the economy and demands shift and technology
You need $275,000 to start a business. A bank will loan you the money at 7.63% for 20 years with annual payments. About how much is the annual payment?
Give an example of a situation where the management of a firm is acting in a manner that is contrary to the principal goal of financial management.
Marley Enterprises has financing cash flow of -$41,400 and investment cash flow of $28,600 for the year. The beginning cash balance was $65,300 and the ending cash balance was $44,800. What was the operating cash flow for the period?
What do you predict as the price of a perpetuity today that pays $400 per year starting in 7 years when the discount rate is 3 percent? What is the rate of return from t to t+1 on a bond that is priced at $2,000 initially, provides a coupon payment a..
In many business decision scenarios, managers faces the dilemma, for example, whether to continue the project or to abandon it, whether to finance a project with debt or equity, etc. How can we apply the knowledge of traditional option pricing techni..
The daily revenue from the sale of fried dough at a local street vendor in Boston is known to be normally distributed with a known standard deviation of $120. The revenue on each of the last 25 days is noted, and the average is computed as $550. A 95..
ACME is deciding where to invest. Project 1 will produce cash flows of $52,000 a year for 6 years. Project 2 has cash flows of $48,000 a year for 8 years. If the interest rate is 15%, which project should ACME select and why?
Which of the following statements concerning powers of invasion are correct? A five-and-five power may be added to a nonmarital trust without the trust assets being includible in the surviving spouse’s gross estate. The surviving spouse need not be g..
A local bank advertises the following deal: Pay us $100 at the end of each year for 12 years and then we will pay you (or your beneficiaries) $100 at the end of each year forever. Calculate the present value of your payments to the bank if the intere..
Given the following information for ABC corp., find the WACC. Assume the company’s tax rate is 35%. Debt: 3,000 8 percent coupon bonds outstanding, 20 years to maturity, selling for 103 percent of par; the bonds make semi-annual payments.
Your firm is contemplating the purchase of a new $555,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $55,000 at the end of that time. You will be able to reduce wo..
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd