Company is expected to have free cash flow

Assignment Help Financial Management

Reference no: EM131050292

A company is expected to have free cash flow of $20 million next year the average cost of capital is WACC = 10% and the expected constant growth rate is g= 6%. The company has $9 million in maketable securities, $7 million in debt, and $6 million in preferred stock. There a 5 million shares outstanding. What is the current intrinsic stock price?

Reference no: EM131050292

Questions Cloud

What is the firm price-earnings ratio : A firm has net income of $198,500 and total equity of 1.15 million. There are 220,000 shares of sock outstanding at a price per share of $14.80. What is the firm's price- earnings ratio?

Determine the probability that the selected person : A political telephone survey of 260 people asked whether they were in favor or not in favor of a proposed law. Each person was identified as Republican or Democrat. The following contingency table shows the results.

Sale of the product lines can be considered profitable : Sequins AB is considering selling one of its two product lines. Product line A is expected to generate a free cash flow of 2 million per year with a growth rate of 3%. Product line B is expected to generate a free cash flow of 1 million per year with..

Forward forward rate for a libor9 deposit : Suppose a company wishes to lock in a 9-month rate to be placed in 3 months. It has been known LIBOR3 is 7.6% and LIBOR12 is 8.25%. What is the forward forward rate for a LIBOR9 deposit to be placed in three months?

Company is expected to have free cash flow : A company is expected to have free cash flow of $20 million next year the average cost of capital is WACC = 10% and the expected constant growth rate is g= 6%. The company has $9 million in maketable securities, $7 million in debt, and $6 million in ..

Develop a probability distribution for this data : A survey of 450 families was conducted to find how many cats were owned by each respondent. The following table summarizes the results.

Audit procedure that involves cost-benefit tradeoffs : An internal auditor must weigh the cost of an audit procedure against the persuasiveness of the evidence to be gathered. Observation is one audit procedure that involves cost-benefit tradeoffs. Which of the following statements regarding observation ..

Current interest rate increased : Suppose that five years ago Cisco Systems sold a bond issue to 15 years who had a face value of $ 1,000 and a coupon rate of 7%. Interest is paid semiannually. If the current interest rate increased to 10% at what price the bonds were sold today?

What will portfolios new beta be after these transactions : You have a $2 million portfolio consisting of a $100,000 investment in each of 20 different stocks. The portfolio has a beta of 1. You are considering selling $100,000 worth of one stock with a beta of 0.8 and using the proceeds to purchase another s..

User Account

All Pages