Mohannad, CFA is the head of valuation team in FCF Inc. He claims that free cash...
Mohannad, CFA is the head of valuation team in FCF Inc. He claims that free cash flow to the firm, FCFF, and free cash flow to equity, FCFE, are equal for a firm with zero debt in its capital structure. Whereas Abdulaziz, a junior analyst in the firm, claims otherwise. Who is correct? Explain.
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Mohannad, CFA is the head of valuation team in FCF Inc. He
claims that free cash...
help!! 4. Corporate Valuation Model ABC Corp. just reported Free Cash Flow (FCF) of $235.69 million...
help!!
4. Corporate Valuation Model ABC Corp. just reported Free Cash Flow (FCF) of $235.69 million Managers expect that FCF will continue to grow at a constant rate of 4%. The firm also has some short-term marketable securities worth $50 million that are considered non-operating assets, so are not included in free cash flow. The firm has short-term debt in the form of notes payable of $150 million, long term debt of $500 million, and has issued preferred stock worth...
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)...
5. More on the corporate valuation model Extensive Enterprise Inc. is expected to generate a free cash flow (FCF) o...
5. More on the corporate valuation model Extensive Enterprise Inc. is expected to generate a free cash flow (FCF) of $10,575.00 million this year (FCF, - $10,575.00 million), and the FCF is expected to grow at a rate of 22.60% over the following two years (FCF, and FCF). After the third year, however, the FCF is expected to grow at a constant rate of 3.18% per year, which will last forever (FCF.). Assume the firm has no nonoperating assets. If...
The firm you are following as an analyst has FCFE of 500 million dollars for this...
The firm you are following as an analyst has FCFE of 500 million
dollars for this year. It's before-tax
cost of debt is 5 percent...
1. The firm, you are following as an analysist, has FCFE of 500 million dollars for this year. Its before- tax cost of debt is 5 percent, and its required rate of return for equity is 11 percent. The company expects a target capital structure consisting of 20 percent debt financing and 80 percent equity...
ABC Telecom Inc. is expected to generate a free cash flow (FCF) of $1,240.00 million this...
ABC Telecom Inc. is expected to generate a free cash flow (FCF)
of $1,240.00 million this year (FCF₁ = $1,240.00 million), and the
FCF is expected to grow at a rate of 20.20% over the following two
years (FCF₂ and FCF₃). After the third year, however, the FCF is
expected to grow at a constant rate of 2.46% per year, which will
last forever (FCF₄). Assume the firm has no nonoperating assets. If
ABC Telecom Inc.’s weighted average cost of...
Consider the following abbreviated financial statements for Pinghua: PINGHUA 2014 and 2015 Partial Balance Sheets Assets...
Consider the following abbreviated financial statements for Pinghua: PINGHUA 2014 and 2015 Partial Balance Sheets Assets Liabilities and Owners’ Equity 2014 2015 2014 2015 Current assets $ 1,850 $ 2,100 Current liabilities $ 740 $ 860 Net fixed assets 7,850 9,120 Long-term debt 4,000 4,300 Equity 4,960 6,060 PINGHUA 2015 Income Statement Info Sales $ 11,300 Costs 5,500 Depreciation 1,000 Interest paid 200 The tax rate is 35%. Long term debt trades at 112% of par. The firm has 500...
You estimate the following free-cash-flow (FCF) data for LipCo (in millions). The firm’s long-term FCF growth...
You estimate the following free-cash-flow (FCF) data for LipCo
(in millions). The firm’s long-term FCF growth rate will be 3% per
year after year three and the firm’s cost of capital is 9%. LipCo
has no debt and 8 million shares outstanding. Using the corporate
valuation model, what is the intrinsic price of one share of LipCo?
(Round at the end)
9. You estimate the following free-cash-flow (FCF) data for LipCo (in millions). The firm's long-term FCF growth rate will...
Which of the following is true of the equity valuation model? a. Discounts free cash...
Which of the following is true of the equity valuation model? a. Discounts free cash flow to the firm by the weighted average cost of capital b. Discounts free cash flow to equity by the cost of equity c. Discounts free cash flow the firm by the cost of equity d. Discounts free cash flow to equity by the weighted average cost of capital e. None of the above
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
ABC Telecom Inc. is expected to generate a free cash flow (FCF) of $8,565.00 million this...
ABC Telecom Inc. is expected to generate a free cash flow (FCF) of $8,565.00 million this year (FCF1 $8,565.00 million), and the FCF is expected to grow at a rate of 19.00% over the following two years (FCF2 and FCF3). After the third year, however, the FCF is expected to grow at a constant rate of 2.10% per year, which will last forever (FCF4) If ABC Telecom Inc.'s weighted average cost of capital (WACC) is 6.30%, what is the current...
help!!
4. Corporate Valuation Model ABC Corp. just reported Free Cash Flow (FCF) of $235.69 million Managers expect that FCF will continue to grow at a constant rate of 4%. The firm also has some short-term marketable securities worth $50 million that are considered non-operating assets, so are not included in free cash flow. The firm has short-term debt in the form of notes payable of $150 million, long term debt of $500 million, and has issued preferred stock worth...
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)...
5. More on the corporate valuation model Extensive Enterprise Inc. is expected to generate a free cash flow (FCF) of $10,575.00 million this year (FCF, - $10,575.00 million), and the FCF is expected to grow at a rate of 22.60% over the following two years (FCF, and FCF). After the third year, however, the FCF is expected to grow at a constant rate of 3.18% per year, which will last forever (FCF.). Assume the firm has no nonoperating assets. If...
The firm you are following as an analyst has FCFE of 500 million
dollars for this year. It's before-tax
cost of debt is 5 percent...
1. The firm, you are following as an analysist, has FCFE of 500 million dollars for this year. Its before- tax cost of debt is 5 percent, and its required rate of return for equity is 11 percent. The company expects a target capital structure consisting of 20 percent debt financing and 80 percent equity...
ABC Telecom Inc. is expected to generate a free cash flow (FCF)
of $1,240.00 million this year (FCF₁ = $1,240.00 million), and the
FCF is expected to grow at a rate of 20.20% over the following two
years (FCF₂ and FCF₃). After the third year, however, the FCF is
expected to grow at a constant rate of 2.46% per year, which will
last forever (FCF₄). Assume the firm has no nonoperating assets. If
ABC Telecom Inc.’s weighted average cost of...
You estimate the following free-cash-flow (FCF) data for LipCo
(in millions). The firm’s long-term FCF growth rate will be 3% per
year after year three and the firm’s cost of capital is 9%. LipCo
has no debt and 8 million shares outstanding. Using the corporate
valuation model, what is the intrinsic price of one share of LipCo?
(Round at the end)
9. You estimate the following free-cash-flow (FCF) data for LipCo (in millions). The firm's long-term FCF growth rate will...
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
ABC Telecom Inc. is expected to generate a free cash flow (FCF) of $8,565.00 million this year (FCF1 $8,565.00 million), and the FCF is expected to grow at a rate of 19.00% over the following two years (FCF2 and FCF3). After the third year, however, the FCF is expected to grow at a constant rate of 2.10% per year, which will last forever (FCF4) If ABC Telecom Inc.'s weighted average cost of capital (WACC) is 6.30%, what is the current...
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