What is an estimate of brandtly price per share

Assignment Help Financial Management
Reference no: EM131551112

Corporate valuation Brandtly Industries invests a large sum of money in R&D; as a result, it retains and reinvests all of its earnings. In other words, Brandtly does not pay any dividends, and it has no plans to pay dividends in the near future. A major pension fund is interested in purchasing Brandtly's stock. The pension fund manager has estimated Brandtly's free cash flows for the next 4 years as follows: $3 million, $6 million, $9 million, and $16 million. After the fourth year, free cash flow is projected to grow at a constant 4%. Brandtly's WACC is 12%, the market value of its debt and preferred stock totals $62 million, and it has 16 million shares of common stock outstanding. Write out your answers completely. For example, 13 million should be entered as 13,000,000. What is the present value of the free cash flows projected during the next 4 years? Round your answer to the nearest cent. Do not round your intermediate calculations. $ What is the firm's horizon, or continuing, value? Round your answer to the nearest cent. $ What is the firm's total value today? Round your answer to the nearest cent. Do not round your intermediate calculations. $ What is an estimate of Brandtly's price per share? Round your answer to the nearest cent. Do not round your intermediate calculations. $

Reference no: EM131551112

Questions Cloud

What is the required rate of return on portfolio consisting : What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y?
What will be your? price-earnings ratio after the merger : What will be your? price-earnings ratio after the merger? (if you pay no? premium)? How does this compare to your? P/E ratio before the? merger?
Compute the net interest expense to be reported : Compute the net interest expense to be reported for this note and related swap transactions as of December 31, 2014.
What is standard deviation of the portfolio : If the correlation between the returns of Security F and Security G is .30, what is the standard deviation of the portfolio?
What is an estimate of brandtly price per share : Brandtly does not pay any dividends, and it has no plans to pay dividends in the near future. What is an estimate of Brandtly's price per share?
What is projects modified internal rate of return : what is the projects modified internal rate of return? Should the firm purchase the project?
What is the market value of the company stock : Burnes, Inc. is a mature firm that is growing at a constant rate of 5.5 percent per year. what is the market value of the company's stock?
What is the implied value of each warrant : Assuming annual interest payments, what is the implied value of each warrant?
Revenue-producing patient services departments : These costs must be allocated to three revenue-producing patient services departments using the direct method.

Reviews

Write a Review

Financial Management Questions & Answers

  Costs and expenses are expected to remain unchanged

Vandalay Industries is trying to choose between two alternative (mutually exclusive) machines. Whichever machine is selected will be utilized for the foreseeable future (in addition, for the foreseeable future, all revenues, costs and expenses are ex..

  What rate can you earn on a one-year risk-free us security

If interest rate parity holds, approximately what rate can you earn on a one-year risk-free U.S. security

  Currently pay dividend-how much is stock currently worth

Netscrape Communications does not currently pay a dividend. You expect the company to begin paying a $2.6 per share dividend in 15 years, and you expect dividends to grow perpetually at 3.6 percent per year thereafter. If the discount rate is 13 perc..

  Loss on these two ipos as of end of first day of trading

You are a broker and have been instructed to place an order for a client to purchase 100 shares of every IPO that comes to market. The next two IPOs are each priced at $30 a share and will begin trading on the same day. At the end of the first day of..

  What effect will a 15 percent increase in sales have on ebit

Cohen's Bowling Emporium has a degree of financial leverage of 2.0 and a degree of combined leverage of 6.0.- What effect will a 15 percent increase in sales have on EBIT?

  What was the total value of the account at the end

At time =0 an engineer deposited $10000 into an account that pays interest at 8% per year,, compounded semi annually. If she withdrew $1000 in months 2,11, and 23, what was the total value of the account at the end of 3 years? Assume NO inter period ..

  First cash flow from his retirement fund at that time

Both men will retire next year and thus will need the first cash flow from his retirement fund at that time.

  Calculate the ratios for both companies

Calculate the Ratios for both companies seperately.- Also compare between them and mention which one is better and why..

  Interested in obtaining a home equity loan

You are interested in obtaining a home equity loan. Your condo was purchased five years ago for $125,000 and now has a market value of $156,000. Originally, you paid $25,000 down on the condo and took out a $100,000 mortgage. The current balance on y..

  What is the addition to retained earnings

Shelton, Inc., has sales of $405,000, costs of $193,000, depreciation expense of $58,000, interest expense of $39,000, and a tax rate of 40 percent. What is the net income for the firm? Suppose the company paid out $48,000 in cash dividends. What is ..

  Current exchange rate

If the current exchange rate is 113 Japanese yen per U.S. dollar and the price of a Big Mac hamburger in the United States is $3.41, the yen price of a Big Mac hamburger in Japan is? How to show the work?

  Account of the relative risk of proposed project

Which of the following statements is correct? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows. What is the best approach to take into account of the relative risk of a proposed project?

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