Calculate the total market value of equity

Assignment Help Financial Management

Reference no: EM132054457

Watson Dunn is planning to value BCC Corporation, a provider of a variety of Industrial metals and minerals. Dunn uses a single-stage FCFF approach. The financial information Dunn has assembled for his valuation is as follows:

• The company has 1,852 million shares outstanding.

• The market value of its debt is $3.192 billion.

• The FCFF is currently $1.1559 billion.

The equity beta is 0.90; the equity risk premium is 5.5 percent; the risk-free rate is 5.5 percent.

• The before-tax cost of debt is 7.0 percent.

• The tax rate is 40 percent.

• To calculate WACC, he will assume the company is financed 25 percent with debt.

• The FCFF growth rate is 4 percent.

Using Dunn's information, calculate the following:

A. WACC.

B. Value of the firm.

C. Total market value of equity.

D. Value per share.

Reference no: EM132054457

Questions Cloud

Importance of handwashing and increase handwashing : Describe how you would educate personnel about the importance of handwashing and increase handwashing compliance amongst the staff?

What will be its optimal cash replenishment level : Watkins Resources faces a smooth annual demand for cash of $1.61 million, incurs transaction costs of $74 every time the firm sells.

Possible diagnosis of infection with methicillin : Which patient would be placed in isolation awaiting possible diagnosis of infection with methicillin- resistant staphylococcus aureus (MRSA)

What are the different telescoped used in astronomy : What are the different telescoped used in astronomy, what are their scopes, functionality, limitations and how did they change your understanding

Calculate the total market value of equity : Watson Dunn is planning to value BCC Corporation, a provider of a variety of Industrial metals and minerals.

Human reproductive behavior : Why or why not should evolutionary principles be applied to human reproductive behavior?

How much do you have to save each month : You want to be a millionaire when you retire in 40 years. How much do you have to save each month if you can earn an annual return of 11 percent?

Given what you now know about mendelian genetics : Given what you now know about Mendelian genetics, discuss how Homo neanderthal characteristics have shown up in modern Homo sapiens.

Clinic for ongoing fatigue and weight loss : A 52 year old woman presented to the clinic for ongoing fatigue and weight loss during the last 6 weeks.

User Account

All Pages