Bart industries is about to be purchased by kramer

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Bart Industries is about to be purchased by Kramer Enterprises. Both firms are in the rocks and mineral industry.  As one of the founders of Bart Industries, you are concerned about the value of the equity in the firm.  You have acquired the following data on your firm:

  1. Bart has 200,000 shares of stock authorized, with 120,000 shares outstanding and held by the current owners.

  2. The free cash flows for next year are estimated to be $642,000.

  3. The WACC for the firm is currently 13%

  4. Bart has $320,000 of outstanding debt.

  5. The growth rate for Bart is estimated to be 5% for the future.

  6. Bart has a surplus of cash in the amount of $985,000.

Required:

  • What is the value of Bart's equity?

Reference no: EM13621777

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