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Question 16 Assume you have a company that has $200 million in cash and $400 million...
Question 17 10 points Save Answer Canyon Buff Corp. has $200 million in cash and $400...
Question 17 10 points Save Answer Canyon Buff Corp. has $200 million in cash and $400 million in market value of debt. The firm will pay dividends as follows: year 1 = $1 year 2 = $2, and year 3 = $4 (all are per share amounts). The dividends are expected to grow 5% per year thereafter. If the equity cost of capital is 15% and the weighted average cost of capital is 10%, then the current equity value per...
Question 19 10 points Save Answer Canyon Buff Corp. has $200 million in cash and 100...
Question 19 10 points Save Answer Canyon Buff Corp. has $200 million in cash and 100 million shares outstanding. Analysts expect the firm to have earnings of $400 million this year. Canyon Buff plans to pay out 30% of its earnings in dividends and they expect to use another 20% of their earnings to repurchase shares. If the firm's equity cost of capital is 15%, the weighted average cost of capital is 10%, and the earnings are expected to grow...
Portage Bay Enterprises has $2 million in excess cash, no debt, and is expected to have...
Portage Bay Enterprises has $2 million in excess cash, no debt, and is expected to have free cash flow of $11 million next year. Its FCF is then expected to grow at a rate of 2% per year forever. If Portage Bay's equity cost of capital is 10% and it has 6 million shares outstanding, what should be the price of Portage Bay stock? The price of Portage Bay's stock is $ per share. (Round to the nearest cent.)
Portage Bay Enterprises has $1 million in excess cash, no debt, and is expected to have...
Portage Bay Enterprises has $1 million in excess cash, no debt, and is expected to have free cash flow of $10 million next year. Its FCF is then expected to grow at a rate of 2% per year forever. If Portage Bay's equity cost of capital is 13% and it has 6 million shares outstanding, what should be the price of Portage Bay stock? The price of Portage Bay's stock is $ per share. (Round to the nearest cent)
2. A firm currently has $10 million in debt, $40 million in cash, and 10 million...
2. A firm currently has $10 million in debt, $40 million in cash, and 10 million shares outstanding. If the present value of the firm's free cash flows is $120 million, what should be its share price? 4. If the tax rate is 40%, what are the net proceeds from selling an asset for $90,000? Assume the asset originally had a book value of $20,000. 7. ReMATE Incorporate expects free cash flow earnings of $6 million next year. Since the...
Basic Stock Valuation: Free Cash Flow Valuation Model The recognition that dividends are dependent on earnings,...
Basic Stock Valuation: Free Cash Flow Valuation Model The recognition that dividends are dependent on earnings, so a reliable dividend forecast is based on an underlying forecast of the firm's future sales, costs and capital requirements, has led to an alternative stock valuation approach, known as the free cash flow valuation model. The market value of a firm is equal to the present value of its expected future free cash flows: Market value of company FCF (1+WACC) + FCF (1+WACC)...
AK Company A expects to have free cash flow (FCF) this year of $1,000,000. FCF is...
AK Company A expects to have free cash flow (FCF) this year of $1,000,000. FCF is expected to grow at a constant rate of 3%. If Company A has a Weighted average cost of capital of 7% (required rate), debt of $9,000,000, no preferred stock and 400,000 shares of common equity outstanding, what is the value per share? 58.20 40.00 26.88 25.00 65.75
Portage Bay Enterprises has $1 million in excess cash, no debt, and is expected to have...
Portage Bay Enterprises has $1 million in excess cash, no debt, and is expected to have free cash flow of $11 million next year. Its FCF is then expected to grow at a rate of 3% per year forever. If Portage Bay's equity cost of capital is 11% and it has 4 million shares outstanding, what should be the price of Portage Bay stock? The price of Portage Bay's stock is? per share. (Round to the nearest cent.)
Question 37 . 1 pts Last year, a company issued $50 million of debt that was...
Question 37 . 1 pts Last year, a company issued $50 million of debt that was entirely bought by a private investor. This debt, which was issued at par and is not traded, has a nine-year remaining life and pays 8.0 percent interest on a semiannual basis. If the company were to issue $10 million in new debt today at par value, it would have to pay a coupon of 12.0 percent. The company's equity has an estimated market value...
1 Year Free Cash Flow 2 $26 million $22 million 3 $29 million 4 $30 million...
1 Year Free Cash Flow 2 $26 million $22 million 3 $29 million 4 $30 million 5 $32 million General Industries is expected to generate the above free cash flows over the next five years, after which free cash flows are expected to grow at a rate of 6% per year. If the weighted average cost of capital is 10% and General Industries has cash of $15 million, debt of $45 million, and 80 million shares outstanding, what is General...
Portage Bay Enterprises has $2 million in excess cash, no debt, and is expected to have free cash flow of $11 million next year. Its FCF is then expected to grow at a rate of 2% per year forever. If Portage Bay's equity cost of capital is 10% and it has 6 million shares outstanding, what should be the price of Portage Bay stock? The price of Portage Bay's stock is $ per share. (Round to the nearest cent.)
Portage Bay Enterprises has $1 million in excess cash, no debt, and is expected to have free cash flow of $10 million next year. Its FCF is then expected to grow at a rate of 2% per year forever. If Portage Bay's equity cost of capital is 13% and it has 6 million shares outstanding, what should be the price of Portage Bay stock? The price of Portage Bay's stock is $ per share. (Round to the nearest cent)
Basic Stock Valuation: Free Cash Flow Valuation Model The recognition that dividends are dependent on earnings, so a reliable dividend forecast is based on an underlying forecast of the firm's future sales, costs and capital requirements, has led to an alternative stock valuation approach, known as the free cash flow valuation model. The market value of a firm is equal to the present value of its expected future free cash flows: Market value of company FCF (1+WACC) + FCF (1+WACC)...
AK Company A expects to have free cash flow (FCF) this year of $1,000,000. FCF is expected to grow at a constant rate of 3%. If Company A has a Weighted average cost of capital of 7% (required rate), debt of $9,000,000, no preferred stock and 400,000 shares of common equity outstanding, what is the value per share? 58.20 40.00 26.88 25.00 65.75
Question 37 . 1 pts Last year, a company issued $50 million of debt that was entirely bought by a private investor. This debt, which was issued at par and is not traded, has a nine-year remaining life and pays 8.0 percent interest on a semiannual basis. If the company were to issue $10 million in new debt today at par value, it would have to pay a coupon of 12.0 percent. The company's equity has an estimated market value...
1 Year Free Cash Flow 2 $26 million $22 million 3 $29 million 4 $30 million 5 $32 million General Industries is expected to generate the above free cash flows over the next five years, after which free cash flows are expected to grow at a rate of 6% per year. If the weighted average cost of capital is 10% and General Industries has cash of $15 million, debt of $45 million, and 80 million shares outstanding, what is General...
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