Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Amarindo, Inc. (AMR), is a newly public firm with 11.5 million shares outstanding. You are doing a valuation analysis of AMR. You estimate its free cash flow in the coming year to be $15.19 million, and you expect the firm's free cash flows to grow by 3.8% per year in subsequent years. Because the firm has only been listed on the stock exchange for a short time, you do not have an accurate assessment of AMR's equity beta. However, you do have beta data for UAL, another firm in the same industry.
Chart/Info Given: UAL ..... Equity Beta: 1.20 Debt Beta: 0.24 Debt-Equity Ratio: 0.8
AMR has a much lower debt-equity ratio of 0.24, which is expected to remain stable, and its debt is risk free. AMR's corporate tax rate is 25%, the risk-free rate is 5.3%, and the expected return on the market portfolio is 10.9%.
a. Estimate AMR's equity cost of capital.
b. Estimate AMR's share price.
What is the value of the investment at the current interest rate of 12.5 percent?
If the future value of an ordinary, 8-year annuity is $8,600 and interest rates are 10.0 percent, what’s the future value of the same annuity due?
Morningside Nursing Home, a not-for-profit corporation, is estimating its corporate cost of capital. Its tax-exempt debt currently requires an interest rate of 6.2 percent, and its target capital structure calls for 60 percent debt financing and 40 p..
A machine was purchased 5 years ago at the cost of $25000. It can be sold now for $6000. If the machine is kept for 5 more years, it is anticipated that the machine can be sold for $1000. a.) At a cost of capital of 12%, what is the present value of ..
If the expectations hypothesis is accepted, what are (1) the expected price of the coupon bond at the end of the first year.
XYZ Co. has purchased 100,000 Canadian dollar put options for speculative purposes. Each option was purchased for a premium of $.03 per unit, with an exercise price of $.90 per unit. XYZ Co. will exercise the options (if it is feasible to exercise t..
A highly risk-averse investor is considering adding one additional stock to a 3-stock portfolio, to form a 4-stock portfolio.
Herm Mueller has invested in a fund that will provide him a cash flow of $11,700 at the end of each of the next 20 years. If the interest rate is 8.5 percent, what is the present value of these cash flows?
Pace Industries comparative balance sheets included accounts receivable of $80,800 at December 31, 2013, and $110,300 at December 31, 2014. Sales reported by Pace on its 2014 income statement amounted to $1,588,500. What is the amount of cash collect..
Fee Founders has perpetual preferred stock outstanding that sells for $34.00 a share and pays a dividend of $5.00 at the end of each year. What is the required rate of return?
In the case Murphy Oil V Armstrong, Armstrong was the guarantor on a contract signed between Murphy Oil and Price Oil. Murphy provided oil in the amount of $259,585.75 to Price. Price did not pay this and filed bankruptcy. Determine how your business..
Which of the following is a recent trend in marketing research?
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd