Use it for future capital budgeting projects

Assignment Help Financial Management

Reference no: EM131321635

Assume today is December 31, 2013. Barrington Industries expects that its 2014 after-tax operating income [EBIT(1 – T)] will be $440 million and its 2014 depreciation expense will be $70 million. Barrington's 2014 gross capital expenditures are expected to be $100 million and the change in its net operating working capital for 2014 will be $30 million. The firm's free cash flow is expected to grow at a constant rate of 6.5% annually. Assume that its free cash flow occurs at the end of each year. The firm's weighted average cost of capital is 8.6%; the market value of the company's debt is $2.8 billion; and the company has 190 million shares of common stock outstanding. The firm has no preferred stock on its balance sheet and has no plans to use it for future capital budgeting projects. Using the corporate valuation model, what should be the company's stock price today (December 31, 2013)? Round your answer to the nearest cent. Do not round intermediate calculations. $ per share.

Reference no: EM131321635

Questions Cloud

What are the differences in plant assets : What are the differences among valuation, depreciation, amortization, and depletion? Is it appropriate to calculate depreciation using two different methods? Why - What is the straight-line method of amortizing discount and premium on bonds payable..

Find the torque acting on the beam : Astudent builds a11.0m long beam that rotates about an axis at one end (see figure below). Its moment of inertia is 3540 kg.m2. When the studentapplies a forceFto the other end of the beam,the beam's angular acceleration is 3.10 rad/s2(ignore grav..

Develope problem-solving skills and declaring variables : Developing problem-solving skills, declaring variables, multi-way branches, data validation. Do not accept values larger than 10 meters or smaller than 1 x 10-20 meters as input for the wavelength.

Discussion on ethical considerations : Find one additional article related to the week's topic on your own - Address why you trust or distrust all or a part of each article. If you distrust all or a part of an article, discuss how it affected your thinking on a topic.

Use it for future capital budgeting projects : Assume today is December 31, 2013. Barrington Industries expects that its 2014 after-tax operating income [EBIT(1 – T)] will be $440 million and its 2014 depreciation expense will be $70 million. The firm has no preferred stock on its balance sheet a..

How queries can be used as a data source : You have been asked to provide training for the newly hired staff of the oncology department. Prepare a PowerPoint presentation that you will use in your training. The presentation must cover the following: Creating, appending, updating, and deleti..

Period of motion for small angles theta : A uniform disc of radius R=10 and mass M=0.5 kg is attached to the end of a uniform rigid rod of length L=1.0 m and mass m=0.5 kg. When the disc is suspended from a pivot as shown in fig, what will be the period of motion for small angles theta?

Find the focal length of the lens : An object located 32.3 cm in front of a lens forms an image on a screen 9.69 cm behind the lens. Find the focal length of the lens. Answer in units of cm.

What is the relationship between alcohol and breast cancer : For patients of 70 years and older, how effective is the use of the influenza vaccine at preventing flu as compared to patients who have not received the vaccine? What is the relationship between alcohol and breast cancer

User Account

All Pages