1]
FCF = net income + non cash expenses - capital expenditure - change in working capital
net income = (revenue * operating profit margin) * (1 - tax rate)
net income = ($200,000,000 * 50%) * (1 - 20%)
net income = $80,000,000
Acquisition expenses are part of capital expenditure.
Depreciation and amortization are non-cash expenses.
FCF = $80,000,000 + $30,000,000 - ($30,000,000 + $10,000,000) - $10,000,000
FCF = $60,000,000, or $60.0 million.
2]
FCF = net income + non cash expenses - capital expenditure - change in working capital
net income = (revenue * operating profit margin) * (1 - tax rate)
Here, non-cash expenses and change in working capital are given and they are assumed to be zero.
Capital expenditure is the reinvestment rate. That is, 80% of net income is reinvested.
net income = ($700,000,000 * 50%) * (1 - 20%) = $280,000,000.
FCF = $280,000,000 - ($280,000,000 * 80%)
FCF = $56,000,000, or $56.0 million.
3]
value of share = equity value / shares outstanding
equity value = firm value - debt + cash
firm value = present value of perpetual cash flows
present value of perpetual cash flows = cash flow / (cost of capital - growth rate)
firm value = $10,000,000 / (10% - 3%)
firm value = $142,857,142.86
equity value = $142,857,142.86 - $20,000,000 + $8,000,000
equity value = $130,857,142.86
value of share = $130,857,142.86 / 50,000,000
value of share = $2.6
I am sorry that I have uploaded more than one question, because I still have many...
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What is the free cash flow of a firm with revenues of $200 million,...
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A company has announced total revenues of $200 million, gross profits of $150 million, operating income of $130 million, and net income of $60 million. What is its net...
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A company is projected to have a free cash flow of $300 million next year, growing at a 6.0% rate until the end of year 3. After that, cash flows...
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You are asked to value Gamecocks Inc. using the relative valuation method. Gamecocks Inc.'s earnings forecast for next year (EPS (next year)) is $2.44. The valuation and earnings of comparable...
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What is the free cash flow of a firm with revenues of $200 million, operating profit margin of 50%, tax rate of 20%, depreciation and amortization expense of $30 million, capital expenditures of $30 million, acquisition expenses of $10 million and change in net working capital of $10 million? Answer in millions, rounded to one decimal place (e. $245.63 = 245.6). Numeric Answer: What's the FCFF of a company with total revenues of $700 million, operating profit margin...
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the hole slove process function
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Suppose a company has a stock price of $20.0 and has had earnings of $2.00 per share during the last twelve months. The...
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Example 5.12: A company had total revenues of $200 million, operating profit margin of 20%, and depreciation and amortization expense of $10 million over the trailing twelve months. The company currently...
Question 5 Homework. Unanswered A company has announced total revenues of $314 million, gross profits of $150 million, operating income of $130 million, and net income of $49 million. What is its net profit margin? Answer in percent, rounded to one decimal place. (e.g., 26.73% = 26.7) Numeric Answer: Unanswered 3 attempts left Submit Question 6 Homework. Unanswered What is the free cash flow of a firm with revenues of $314 million, operating profit margin of 39%, tax rate of...
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number 3 is same question with number 1, just answer 1and 2
What's the FCFF of a company with total revenues of $700 million, operating profit margin of...
What is the free cash flow of a firm with revenues of $343 million, operating profit margin of 36%, tax rate of 31%, depreciation and amortization expense of $23 million, capital expenditures of $37 million, acquisition expenses of $6 million and change in net working capital of $17 million? Answer in millions, rounded to one decimal place (e.g., $245.63 = 245.6).