Determine what should be the companys stock price today

Assignment Help Financial Econometrics

Reference no: EM13334487

Assume that today is December 31, 2012, and that the following information applies to Vermeil Airlines:

After-tax operating income [EBIT(1 - T)] for 2013 is expected to be $700 million.
The depreciation expense for 2013 is expected to be $90 million.
The capital expenditures for 2012 are expected to be $450 million.
No change is expected in net operating working capital.
The free cash flow is expected to grow at a constant rate of 7% per year.
The required return on equity is 16%.
The WACC is 10%.
The market value of the company's debt is $4 billion.
180 million shares of stock are outstanding.

Using the corporate valuation model approach, what should be the company's stock price today?

Reference no: EM13334487

Questions Cloud

What will ttcs dividend and capital gains yields be once : Taussig Technologies Corporation (TTC) has been growing at a rate of 14% per year in recent years. This same growth rate is expected to last for another 2 years, then decline to gn = 4%.

Calculate the pressure of your sample : You have a sample of Xenon in a rectangular container. The gas exerts a total force of 58.1 N perpendicuar to one of the container walls, Calculate the pressure of your sample

What is the magnitude of the force between the two wires : Two long, straight, parallel wires of length 4.1 m carry parallel currents of 3.2 A and 1.1 A. What is the magnitude of the force between the two wires

Should personal use of the internet at work be permitted : Should personal use of the Internet at work be permitted, Should management be allowed to monitor all messages, Should employees be allowed to read and send personal e-mail during breaks or lunch time?

Determine what should be the companys stock price today : Assume that today is December 31, 2012, and that the following information applies to Vermeil Airlines: After-tax operating income [EBIT(1 - T)] for 2013 is expected to be $700 million. The depreciation expense for 2013 is expected to be $90 million.

Evaluate the external positive and negative criticisms : Evaluate the external positive and negative criticisms of the company BOEING political practices

Determine where will the block come to rest : a 2kg block of wood slides on the surface shown. all surfaces are frictionless, except the trough which is rough; the coefficient of kinetic friction there is 0.2 and the trough is 15m long. where will the block come to rest

What is meant by the concept of social crime : What is meant by the concept of "social crime?" Why is the very criminality of some of these offenses controversial? Provide two examples to illustrate.

What is the minimum mass of nahco3 : If 24mL of 6.6 M H2SO4 was spilled, what is the minimum mass of NaHCO3 that must be added to the spill to neutralize the acid? If 24mL of 6.6 M H2SO4 was spilled, what is the minimum mass of NaHCO3 that must be added to the spill to neutralize..

User Account

All Pages