Prepare valuation model for five year and terminal value

Assignment Help Financial Management

Reference no: EM131549234

XYZ Corporation is expected to have EBIT of $18.5 million, interest expense of $50,000 this year. Debt increased by $150,000 this year and will increase by 4% thereafter. XYZ Corporation is in the 35% tax bracket, will have $2M in depreciation, $3.5M in capital expenditures, and have a $300,000 increase in net working capital this year. The firm has 2,500,000 shares. Total debt is $1million (inclusive of the additional debt for this year), risk free rate is 1%, beta is 0.70, market return is 8%. Capital structure is 40% debt, 60% equity, growth rate is 3%. Prepare a valuation model for 5 year and terminal value. Determine XYZ’s FCFF per share and FCFE per share?

Reference no: EM131549234

Questions Cloud

Find out what is the annual cost per employee : I've been trying to find out what is the annual cost Per employee for an ERP PeopleSoft System for a College or University?

What action could be undertaken by fire crews : What action could be undertaken by fire crews in respective fire districts to know the types of buildings within the district?

Considering operating a lock-box system : Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lock-box system.

What does it mean to be a part of we the people : What does it mean to be a part of We the Peopl"? What rights do We the People have and where do those rights come from?

Prepare valuation model for five year and terminal value : Prepare a valuation model for 5 year and terminal value. Determine XYZ’s FCFF per share and FCFE per share?

Company had no debt in its capital structure : What is the current beta on MME's common stock? What would MME's beta be if the company had no debt in its capital structure?

Calculate the rate of return on equity for each firm : Calculate the return on invested capital (ROIC) for each firm. Calculate the rate of return on equity (ROE) for each firm.

Calculate the monthly payments on this mortgage : Calculate the monthly payments on this mortgage. How much total interest is paid on this mortgage?

Critically evaluate the sample size : Critically evaluate the sample size and critically evaluate the statements for meaningfulness - evaluate the statements for statistical significance.

User Account

All Pages