What is the present value of its growth opportunities

Assignment Help Financial Management
Reference no: EM13890242

Tri-coat Paints has a current market value of $34 per share with earnings of $1.66. What is the present value of its growth opportunities (PVGO) if the required return is 5%?

Reference no: EM13890242

Questions Cloud

Equity prior to announcement is expected to gain or loss : FARO Technologies, whose products include protable 3D measurement equipment, recently had 17 million shares outstanding trading at $42 a share. Suppose the company announces its intention to raise $200 million by selling new shares. What percentage o..
Total of credit entries to the cash account amounted : In the first month of operations, the total of the debit entries to the Cash account amounted to $1,000 and the total of the credit entries to the Cash account amounted to $600. The Cash account has a
An awareness of the normal balances of accounts : An awareness of the normal balances of accounts would help you spot which of the following as an error in recording?
What further steps should management take to reduce costs : What further steps should management take to reduce costs? Which steps that management is proposing do you believe will be the most difficult to accomplish?
What is the present value of its growth opportunities : Tri-coat Paints has a current market value of $34 per share with earnings of $1.66. What is the present value of its growth opportunities (PVGO) if the required return is 5%?
Short-term credit is generally riskier than long-term credit : Risk COLLAPSE From a borrower’s standpoint “short-term credit is generally riskier than long-term credit” (Brigham & Ehrhardt, 2013). Short term credit, even if it does have better rates than the long term alternative, would still require higher paym..
What are some of the immediate needs of the people : Create a 5-minute Power Point presentation that includes the following information: An overview of the stories you selected - who, what, where, when, etc. What are some of the immediate needs of the people who are involved in these situations
What was the operating cash flow per share : Weston Corporation had earnings per share of $1.41, depreciation expense of $592,800, and 240,000 shares outstanding. What was the operating cash flow per share? If the share price was $51, what was the price-cash flow ratio?
The required rate of return on the market : The risk-free rate of return is 4%, the required rate of return on the market is 10%, and High-Flyer stock has a beta coefficient of 2.0. If the dividend per share expected during the coming year, D1, is $4.60 and g = 6%, at what price should a share..

Reviews

Write a Review

Financial Management Questions & Answers

  Financial statements from major medical center case study

Financial Analysis Using the financial statements from the Major Medical Center Case Study-Review the financial statements. Analyze any unusual items and examine the balance sheet, operating statement, and cash flow statement. Review the notes and an..

  What is your estimate of the stocks current price

A company currently pays a dividend of $2 per share (D0 = $2). It is estimated that the company's dividend will grow at a rate of 16% per year for the next 2 years, then at a constant rate of 8% thereafter. The company's stock has a beta of 1.25, the..

  Expected cash flow related to this debt issue

FRN and Expected Cash Flows. A U. S. firm issues a three- year FRN with a face value of $ 250,000. The coupon is set at LIBOR plus 50 basis points and is paid annually. The coupon rate is set at the beginning of the year. The firm’s CEO notes that th..

  When firm holds cash in excess of some necessary minimum

When a firm holds cash in excess of some necessary minimum, it incurs an opportunity cost. The opportunity cost of excess cash (held in currency or bank deposits) is the interest income that could be earned by the next best use, such as investment in..

  Free cash flow growth rate-current intrinsic stock price

This year, Huxley Building Supplies' free cash flow is $1.75 million. Its free cash flow growth rate is expected to be constant at 25% for 2 years, after which free cash flows are expected to grow at a rate of 6% forever. What is the best estimate of..

  What rate is the dividend projected to be growing

Shares of SoHot Donuts common stock are currently selling for $15. Next year’s dividend is expected to be $1.50 per share and the market rate of return is 13%. At what rate is the dividend projected to be growing?

  What should your bond sell for in the secondary market

You are holding a bond with an annual coupon rate of 3.5% that matures in 11 years. Bonds recently issued of similar risk have a coupon rate of 4%. What should your bond sell for in the secondary market?

  Briefly summarize the evidence relating to ipo under pricing

Briefly summarize the evidence relating to IPO under pricing, and discuss possible reasons for the phenomena. You are the CFO of a non-dividend paying firm that currently has excess cash reserves. You are preparing for an internal management meeting ..

  Different capital structures-equity plan and levered plan

Rise Against Corporation is comparing two different capital structures: an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 170,000 shares of stock outstanding. Under Plan II, there would be 120,000 shares o..

  For the average business leader who is not in a finance role

For the average business leader who is not in a finance role, how do risk, return, and the cost of capital impact him or her? How can you synthesize this into the workplace?

  What is the firms cost of equity of the current stock price

The Giants Jersey Stores just paid its first annual dividend of $0.12 a share. The firm plans to increase the dividend by 3.5% per year indefinitely. What is the firm's cost of equity of the current stock price is $6.50 a share?

  What is the factorys present value

A factory forecasts to produce the following cash flows: If the cost of capital is 6%, what is the factory's present value?

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