What are the Rules for Valuing Cash Flows?"
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What role does "Compounding" play in the valuing of cash flows at different points in time?
In valuing bonds, the most important consideration is: the bond's future cash flows. whether coupon payments are annual or semiannual. the bond's past cash flows. the bond's past and future cash flows.
You are valuing a company with free cash flows expected to grow at a stable 2.9% rate in perpetuity. Analysts are forecasting free cash flows of $13 million for next year (FCFF1). The company has $21 million of debt and $8 million of cash. Cost of capital is 10.3%. There are 24 million shares outstanding. How much is each share worth according to your valuation? Round to one decimal place.
You are valuing a company with free cash flows expected to grow at a stable 2.8% rate in perpetuity. Analysts are forecasting free cash flows of $16 million for next year (FCFF1). The company has $23 million of debt and $8 million of cash. Cost of capital is 10.6%. There are 23 million shares outstanding. How much is each share worth according to your valuation? Round to one decimal place.
You are valuing a company with free cash flows expected to grow at a stable 1.5% rate in perpetuity. Analysts are forecasting free cash flows of $50 million for next year (FCFF1). The company has $40 million of debt and $5 million of cash. Cost of capital is 14.0%. There are 10 million shares outstanding. How much is each share worth according to your valuation? Round to one decimal place.
You are valuing a company with free cash flows expected to grow at a stable 2.0% rate in perpetuity. Analysts are forecasting free cash flows of $36 million for next year (FCFF1). The company has $33 million of debt and $6 million of cash. Cost of capital is 12.6%. There are 15 million shares outstanding. How much is each share worth according to your valuation? Round to one decimal place.
You are valuing a company with free cash flows expected to grow at a stable 1.9% rate in perpetuity. Analysts are forecasting free cash flows of $39 million for next year (FCFF1). The company has $34 million of debt and $6 million of cash. Cost of capital is 12.9%. There are 14 million shares outstanding. How much is each share worth according to your valuation? Round to one decimal place.
2. Now relax the assumption that the expected free cash flows are uncorrelated with the spot exchange rate. Give an example where the cash flows of the foreign project are affected by exchange rate risk, and suggest an approach to address this issue when valuing the project. Add your own assumptions to the information above to provide a simple numerical illustration of capital budgeting with exchange rate risk.
Which of the following is NOT a criticism of valuing a firm using the multiples approach? A. The multiples approach give us the relative value, not the intrinsic value B. The multiples approach does not directly incorporate discounted cash flows C. The selection of the peer or industry group dramatically alters the outcome of the multiples approach OD. The multiples approach is most appropriate for young firms with difficult to forecast cash flows
What are the categories of cash flows that appear on a statement of cash flows? O Cash flows from investing, financing, and service activities. Cash flows from operating, production, and internal activities. Cash flows from financing, production, and growth activities. Cash flows from operating, investing, and financing activities. QUESTION 20 Miranda starts a new business by taking $5,000 out of her personal savings account and depositing the money into a business bank accoun When Miranda does this, the accounting equation...