What should be the company stock price today

Assignment Help Finance Basics

Reference no: EM13295060

Assume that today is December 31, 2012, and that the following information applies to Vermeil Airlines:

a. After-tax operating income [EBIT(1-T)] for 2013 is expected to be $500 million.

b. The depreciation expense for 2013 is expected to be $100 million.
c. The capital expenditures for 2013 are expected to be $200 million.
d. No change is expected in net operating working capital.
e. The free cash flow is expected to grow at a constant rate of 6% per year.
f. The required return on equity is 14%.
g. The WACC is 10%.
h. The market value of the company's debt is $2 billion.
i. 200 million share of stock are outstanding.

Using the corporate valuation model approach, what should be the company's stock price today?

Reference no: EM13295060

Questions Cloud

Why should a banker attend to the impacts of each : Why should a banker attend to the impacts of each of these components rather than simply looking at the total of loans and deposits?

Find at what speed must the golfer hit the bal : A seasoned mini golfer is trying to make par on a tricky hole #5. The golfer can complete the hole by hitting the ball from the flat section it lays on, at what speed must the golfer hit the ball to land the ball in the hole

What is the weighted average cost of capital : Its pretax cost of preferred equity is 7%, and its pretax cost of debt is also 5%. If the corporate tax rate is 35%, what is the weighted average cost of capital?

What is the average expected inflation : Assume that expected rates of inflation over the next 5 years are 4 percent, 7 percent, 10 percent, 8 percent, and 6 percent, respectively. What is the average expected inflation rate over this 5-year period?

What should be the company stock price today : Using the corporate valuation model approach, what should be the company's stock price today?

Evaluate the concentration of the final solution : A volume of 32.2 mL of a 1.16 M KMnO4 solution is mixed with 17.7 mL of .692 M KMnO4 Solution. Caclulate the concentration of the final solution.

Calculate the volume occupied by the gas : A 0.600 mole sample of an ideal gas is at a temperature of 303 K at atmospheric pressure. Calculate the volume occupied by the gas

Evaluate the concentration of the final solution : A volume of 32.2 mL of a 1.16 M KMnO4 solution is mixed with 17.7 mL of .692 M KMnO4 Solution. Caclulate the concentration of the final solution.

Calculate irms for square-wave current based upon definition : That is, the Irms value of an oscillating current is found by calculating the average power in the resistor and equating it to the direct-current power. Based upon this definition, calculate Irms for square-wave currents.

User Account

All Pages