Determine the estimated intrinsic value

Assignment Help Finance Basics
Reference no: EM133073414

A stock has no dividends. The last period's FCFF is $4.83 and it has an estimated annual free cash flow growth rate of 6.5%. The WACC for this stock is 9.1% and its long term growth rate is 2.46%. It also has an ROE of 13.9%. You also found out that the firm has debt per share of $31.6. What it the estimated intrinsic value using the constant state FCFF method? State your answer as a dollar amount with two decimal places

Reference no: EM133073414

Questions Cloud

Environments-allow for individual-collaborative learning : Teachers consistently work with colleagues to create environments that allow for individual and collaborative learning, inspire confident social collaboration
Find the beta of stock : Consider the following two scenarios for the economy and the expected returns in each scenario for the market portfolio, an aggressive stock A, and a defensive
What is the reason for importing market december : a. What is the reason for this importing market's December price being less than the exporting markets's Dec price?
Expected returns and volatilities of the complete portfolio : In Excel, calculate the expected returns and volatilities of the complete portfolio, by changing the weights of the risky portfolio from 0 to 100% with a 5% inc
Determine the estimated intrinsic value : What it the estimated intrinsic value using the constant state FCFF method? State your answer as a dollar amount with two decimal places
Weighted average cost of capital : A firm has only two funding sources, debt and equity. Their percentage of debt is 59%, their tax rate is 23.9%, and their pretax cost of debt is 3.85%.
Evaluate the program as a portfolio of options : Evaluate the program as a portfolio of options (you should begin by ignoring, at first, the opportunity to invest $450 in year 6 and focus only on the first two
Why would anyone invest in a hybrid fund : Why would anyone invest in a hybrid fund?
Disability experience : Discuss your experience or encounter with an individual with a disability and talk about your initial reaction toward this person.

Reviews

Write a Review

Finance Basics Questions & Answers

  Stock current value per share

The dividend is expected to grow at a constant rate of 4% a year. The required rate of return on the stock, rs, is 17%. What is the stock's current value per share?

  What is the portfolio beta

$45,000 is invested in a stock with a beta of 0.5, and $30,000 is invested in a stock with a beta of 1.7. What is the portfolio's beta?

  In october 2012 average house price in the united states

in october 2012 the average house price in the united states was 223500. in october 2003 the average price was 285000.

  Calculation of interest rate swap in return for libor

Under the terms of an interest rate swap, a financial institution has agreed to pay 10% per annum and to receive the 3-monthLIBOR in return on a notional principal of $50 million with payments exchanged every 3 months.

  Major changes to us banking laws

Discuss at least two major changes to U.S. banking laws in the 1990s. Explain how those changes have had a major impact on banks (consider the size and complexity of banks).

  Review case of the bond yields

Bond Yields. Stein Co. issued 15-year bonds two years ago at a coupon rate of 5.4 percent. The bonds make semiannual payments.

  Purchase the stock of pqr company

PQR's beta is 1.4, risk-free rate is 8% and expected return on market portfolio is 14%. Should Mr. Edward purchase the stock of PQR company? Explain why.

  What is the expected return and standard deviation

Denard has two investment opportunities. He can invest in The Sunglasses Company or The Umbrella Company. What is the expected return and standard deviation of each company?

  What is the beta coefficients of apple

The standard deviation of rM is 12%. What is the beta coefficients of Apple?

  Commercial banks and other financial institutions

Medium term & long term loans are obtained from commercial banks and other financial institutions. This funds are mainly used to finance major expansions or profit financing.

  What maximum growth rate can abbai achieve

To support its future growth, the firm plans to raise some debt from creditors while keeping its debt-equity ratio unchanged. What maximum growth rate can Abbai achieve?

  Decision to hedge with interest rate swaps- explain the

decision to hedge with interest rate swaps- explain the types of cash flow characteristics that would cause a firm to

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd