Bayani Bakery's most recent FCF was $46 million; the FCF is expected to grow at a constant rate of 6%. The firm's WACC is 10% and it has 15 million shares of common stock outstanding. The firm has $30 million in short-term investments, which it plans to liquidate and distribute to common shareholders via a stock repurchase; the firm has no other nonoperating assets. It has $368 million in debt and $58 million in preferred stock. What is the value of operations? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places. $ million Immediately prior to the repurchase, what is the intrinsic value of equity? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places. $ million Immediately prior to the repurchase, what is the intrinsic stock price? Round your answer to the nearest cent. $ per share How many shares will be repurchased? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places. million shares How many shares will remain after the repurchase? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places. million shares Immediately after the repurchase, what is the intrinsic value of equity? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places. $ million The intrinsic stock price? Round your answer to two decimal places. $ per share
We will use the Discounted Cash flow (DCF) Approach to get the value of operations of the firm and using that we will find the intrinsic value of equity which will help us to find the share price. After this it becomes easy to calculate the number of shares repurchased and the number of remaining shares after repurchase. The intrinsic value of equity will not change after repurchase but the intrinsic share price will change because the number of outstanding shares have changed.
Bayani Bakery's most recent FCF was $46 million; the FCF is expected to grow at a...
Stock Repurchase Bayani Bakery's most recent FCF was $50 million; the FCF is expected to grow at a constant rate of 6%. The firm's WACC is 10% and it has 15 million shares of common stock outstanding. The firm has $30 million in short-term investments, which it plans to liquidate and distribute to common shareholders via a stock repurchase; the firm has no other nonoperating assets. It has $364 million in debt and $65 million in preferred stock a. What...
Bayani Bakery's most recent FCF was $48 million; the FCF is expected to grow at a constant rate of 6%. The firm's WACC is 10%, and it has 15 million shares of common stock outstanding. The firm has $30 million in short-term investments, which it plans to liquidate and distribute to common shareholders via a stock repurchase; the firm has no other nonoperating assets. It has $368 million in debt and $61 million in preferred stock. What is the value...
Stock Repurchase Bayani Bakery's most recent FCF was $49 million; the FCF is expected to grow at a constant rate of 6%. The firm's WACC is 13%, and it has 15 million shares of common stock outstanding. The firm has $30 million in short-term investments, which it plans to liquidate and distribute to common shareholders via a stock repurchase; the firm has no other nonoperating assets. It has $361 million in debt and $63 million in preferred stock. What is...
Stock Repurchase Bayani Bakery's most recent FCF was $49 million; the FCF is expected to grow at a constant rate of 6%. The firm's WACC is 14%, and it has 15 million shares of common stock outstanding. The firm has $30 million in short-term investments, which it plans to liquidate and distribute to common shareholders via a stock repurchase; the firm has no other nonoperating assets. It has $365 million in debt and $57 million in preferred stock. a. What...
A Bayani Bakery’s most recent FCF was $48 million; the FCF is expected to grow at a constant rate of 6%. The firm’s WACC is 12%, and it has 15 million shares of common stock outstanding. The firm has $30 million in short-term investments, which it plans to liquidate and distribute to common shareholders via a stock repurchase; the firm has no other nonoperating assets. It has $368 million in debt and $60 million in preferred stock. FCF = $48.0...
Save Su n t for Grading Problem 15-12 Show Additional Indo 15-9: A Tale of Two Cash Distributions: Dividends versus Stock Repurchases Problem Walk Through Problem 15-12 Stock Repurchase Bayani Bakery's most recent FF was $47 milion; the FO is expected to grow of a constant role of 6%. The firm's WACC IS 14% and it has 15 m on shares of common stock outstanding. There has 50 milion in short-term Investments, which it plans to date and distribute to...
Problem 14-04 Stock Repurchase A firm has 10 million shares outstanding with a market price of $35 per share. The firm has $35 million in extra cash (short-term investments) that it plans to use in a stock repurchase; the firm has no other financial investments or any debt. What is the firm's value of operations after the repurchase? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer...
is expected to grow at a constant 4% rate. Dantzler's WACC is 11%. Year FCF ($ millions) $11 $34 $56 a. What is Dantzler's horizon, or continuing, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round intermediate calculations. Round your answer to two decimal places. million b. What is the firm's market...
Pettit Printing Company has a total market value of $100 million, consisting of 1 million shares selling for $50 per share and $50 million of 10% perpetual bonds now selling at par. The company's EBIT is $10.10 million, and its tax rate is 35%. Pettit can change its capital structure either by increasing its debt to 70% (based on market values) or decreasing it to 30%. If it decides to increase its use of leverage, it must call its old...
Problem 16-9 Capital Structure Analysis Pettit Printing Company has a total market value of $100 million, consisting of 1 million shares selling for $50 per share and $50 million of 10% perpetual bonds now selling at par. The company's EBIT is $11.33 million, and its tax rate is 15%. Pettit can change its capital structure either by increasing its debt to 70% (based on market values) or decreasing it to 30%. If it decides to increase its use of leverage,...