Let's say that you were a financial consultant hired to place a value on the stock of a privately held company that does not pay dividends. How would you do this?
If I were a financial consultant who would be valuing a stock which is not paying any dividend, then I would be trying to value these stocks through any method other than the dividend discounting method, and I will be trying to most probably use all such methods which are discounting the cash flows which are associated with the company and the most preferable method will be discounting cash flows methods, which will be an absolute method of valuation of this company.
Since, this is a privately held company so this won't be fair to compare it with other companies which are listed in the similar space ,so I would be trying to ascertain the cash flows associated with the company and find the absolute valuation of the company.
Let's say that you were a financial consultant hired to place a value on the stock...
You have been hired as a consultant to ABC company that is seeking to increase its value. ABC has asked you to estimate the value of two privately held companies that ABC is considering acquiring. But first, the senior management of ABC would like for you to explain how to value companies that don't pay any dividends. You have structured your presentation around the following questions. 1. List the two types of assets that companies own. 2. What are assets-in-place?...
You were hired as a consultant to Gambino Company, whose target capital structure is 60% debt, 15% preferred, and 25% common equity. The before-tax cost of debt is 8.00%, the cost of preferred is 7.02%, and the cost of retained earnings is 15.75%. The firm will not be issuing any new stock. What is its WACC? State in percentage terms without the percent sign symbol and round to the second decimal place. (Thus, 12.98756% would be written as 12.99 to...
If you were hired as a consultant, which international approach (i.e., export, licensing, etc) would you recommend the company adopt? Be sure to explain and justify your recommendation.
If you were hired by the United States Environmental Protection Agency as a public relations consultant, how would you accomplish the goal of educating the public of the environmental impacts of their food choices
) Congratulations! You have been hired as a financial consultant to help Labriola, Inc. estimate its market beta. Labriola estimates that their project will return -20% if the market returns -10%, and +5% if the stock market returns +10%. What would you use as the market beta estimate for the project?
You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of common equity is 12.25%. The firm will not be issuing any new stock. What is its WACC? Answer is a percentage
Suppose that you are hired as a consultant by Quantum Inc. to help them increase their value. The company has expected growth rate of 8%, ROIC of 8%, and cost of capital of 9%. What would you suggest Quantum Inc. do?
You were hired as a consultant to Okland Company, whose target capital structure is 51% debt, and 49% common equity. The interest rate on new debt is 5.40%, the cost of retained earnings is 13.60%, and the tax rate is 22% The firm will not be issuing any new stock. What is Okland's WACC?
You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred stock, and 45% common equity. The cost of debt is 9.00%, cost of preferred stock is 7%, and cost of common equity is 12.75%. The tax rate is 40%. What is its WACC? A) 8.73% B) 8.95% C) 9.12% D) 8.81% E) 8.68%
you were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6%, the cost of preferred is 7.50%, and the common stock has the following CAPM data: risk free rate of 5%, market risk premium of 6%, and beta 1.05. The firm will not be issuing any new stock. What is its WACC