What is the value of firm

Assignment Help Financial Management

Reference no: EM131570021

You are going to value Lauryn’s Doll Co. using the FCF model. After consulting various sources, you find that Lauryn has a reported equity beta of 1.6, a debt-to-equity ratio of .7, and a tax rate of 30 percent. Assume a risk-free rate of 6 percent and a market risk premium of 9 percent. Lauryn’s Doll Co. had EBIT last year of $54 million, which is net of a depreciation expense of $5.4 million. In addition, Lauryn made $6.75 million in capital expenditures and increased net working capital by $2.9 million. Assume her FCF is expected to grow at a rate of 3 percent into perpetuity.

What is the value of the firm?

Reference no: EM131570021

Questions Cloud

Calculating rates of return : What rate of return did you earn on your investment in Placo's stock?

Customized unit and system tested application software : Customized unit and system tested application software. Acceptance testing. The central goal of user acceptance testing is to exhibit that the system works.

Discuss the properties of the bipartite graph : Let g be a bipartite graph with bipartition sets VI, V2 and assume that g has a perfect matching. Add two vertices x and y to G such that x is adjacent.

How many messengers can he employ : The diagram represents a system of roads from A to B. The mayor of town A wishes to send a message to the mayor of town B.

What is the value of firm : You are going to value Lauryn’s Doll Co. using the FCF model. What is the value of the firm?

Aspect of human resource management or work : This assignment challenges you to study what faith and scripture say about some aspect of Human resource management or work.

Identify at least three hardware and software tools : Identify at least three hardware and software tools that you would include in the design of the lab and explain your reasons behind your choices.

Advantages and disadvantages of each methodology : What are the advantages and disadvantages of each methodology? What criteria would you use to choose one particular methodology over another for a particular.

Variable market value of equity divided by total liabilities : The variable Market Value of Equity divided by Total Liabilities in the Altman Z-Score measures the current level of ________.

User Account

All Pages