What is the market value of the firm

Assignment Help Financial Management
Reference no: EM131327516

Consider a growing firm that produces cash of $10 million next year. The firm's cash flow growth rate is 15% per annum. The firm's cost of capital is 20%.

(a) What is the market value of this firm?

(b) What is the firm's P/E ratio if it has no debt?

Reference no: EM131327516

Questions Cloud

Write paper on improving retention in the workplace : Write 1400 word paper on improving retention in the workplace. APA format and include at least three reliable references
How does your selected companys dividend payout : How does your selected company's dividend payout, dividend yield, and dividend per share compare to other companies in its industry? Has the company's dividend strategy been similar to other companies in its industry?
Calculate xyzs 2013 current and quick ratios : Calculate XYZ's 2013 current and quick ratios based on the projected balance sheet and income statement data.
Analysis of credible sources in field of special education : For this Assignment, you will identify and provide an analysis of credible sources in the field of special education. The purpose of this assignment is for you to begin to differentiate between primary and secondary sources, as well as to determin..
What is the market value of the firm : Consider a growing firm that produces cash of $10 million next year.- What is the market value of this firm?- What is the firm's P/E ratio if it has no debt?
What is your forecast assuming no risk premium : What is your forecast level, assuming 3.5% risk premium (difference between corporate earnings yield and 10-year government bond)?- What is your forecast, assuming no risk premium?
How you expect the knowledge you have gained to be helpful : FIN 501- Explain how these concepts may be applicable and how you expect the knowledge you have gained to be helpful. Demonstrate your ability to provide reasoning for your response to discussion questions.
How can an investor increase the amounts that they save : How can an investor increase the amounts that they save?- How can investors benefit from the compounding of interest (time value of money)?
Determine the real rate of return on a bond : Determine the real rate of return on a bond when inflation is around 2.4 percent and the bond yield is 5.6 percent.

Reviews

Write a Review

Financial Management Questions & Answers

  Markets required yield to maturity on comparable-risk bond

The 19-year, $1,000 par value bonds of Waco Industries pay 6 percent interest annually. The market price of the bond is $1,095, and the market's required yield to maturity on a comparable-risk bond is 4 percent. Compute the bond's yield maturity. Det..

  Making plans for retirement

You and your wife are making plans for retirement. You plan on living 25 years after you retire and would like to have $75,000 annually on which to live. Your first withdrawal will be made one year after you retire and you anticipate that your retire..

  About the return on equity

Midwest Packaging's ROE last year was only 5%; but its management has developed a new operating plan that calls for a debt-to-assets ratio of 45%, which will result in annual interest charges of $238,000. The firm has no plans to use preferred stock...

  Calculate the economic life in mscf per month

Calculate the Economic Life in Mscf per month for a gas lease with WI = 100%, NRI = 87.5%, condensate price = $15/STB, gas price = $2.25/Mscf, condensate yield = 5 STB/Mscf, gas and severance tax (each) = 4.5%. Assuming that ad valorem tax is negligi..

  What is the future value-interest rate

What is the future value of $2,900 in 19 years assuming an interest rate of 8.2 percent compounded semiannually?

  Total asset turnover and the equity multiplier

The Green Giant has a 5 percent profit margin and a 62 percent dividend payout ratio. The total asset turnover is 1.2 and the equity multiplier is 1.6. What is the sustainable rate of growth?

  Primary concerns should your firm make change to credit

In order to increase sales, the sales manager of your firm is proposing to offer 90 day credit terms rather than 60 day credit terms to customers. As a financial manager which of the following would be one of your primary concerns should your firm ma..

  Manufacturing company purchased electrical services

A manufacturing company purchased electrical services for the next 5 years to be paid for with $70,000 now. The service after 5 years will be $15,000 per year beginning with the sixth year. After 2 years service the company, having surplus profits, r..

  Computer fraud-used to distribute stock options to employees

Computer Fraud? Marcie Lewis and Fred Cisco worked as accountanting managers at Save-Lot Foods Stores. The company distributes stock options to its 10,000 employees as a part of their compensation package. Marcie and Fred both work with the ACE compu..

  Asset accounts on the balance sheet are listed

Asset accounts on the balance sheet are listed in order of

  Difference between fixed-variable and semivariable costs

As policymakers and healthcare managers consider various ways to contain the rising costs of health care, it is useful to examine the patterns and elements of health care costs that are needed to run the United States delivery system. Explain the dif..

  Calculation of annual bond yields

Recalling the standard (annual interest accrual) calculation of annual bond yields. b) A 5% one-year bond with a face value of $100 sells for $106. What is the bond's yield to maturity (redemption yield)? c) If the interest rate is 10% what is the pr..

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