Estimated intrinsic value using multistage fcff method

Assignment Help Finance Basics
Reference no: EM133072038

A stock has no dividends. Last period's FCFF is $4.31 and it has an estimated annual free cash flow growth rate of 7.6%. The company should maintain this growth rate for 3 more years before it decays to the estimated long term growth rate of 2.46%. The WACC for this stock is 6.1% and its current ROE is 29.5%. You also found out that the firm has debt per share of $46.61. What it the estimated intrinsic value using the multistage FCFF method? State your answer as a dollar amount with two decimal places.

Reference no: EM133072038

Questions Cloud

What is the coupon rate and current yield : A 6 year Circular File Bond pays interest of $80 annually and sells for $950. What is the coupon rate, current yield, and yield to maturity
Find the beta of stock : Consider the following two scenarios for the economy and the expected returns in each scenario for the market portfolio, an aggressive stock A, and a defensive
What is the percentage change in the real value : The New Zealand dollar value changed from US$ 0.64 (US$ 0.64 = NZ$ 1) at the beginning of the year to US$ 0.63 at the end of the year. The US inflation is 2% an
Compute diluted earnings per share : Green Enterprises issued, at par, 40, $2,500. 12% bonds, each convertible into 100 shares of common stock. Compute diluted earnings per share
Estimated intrinsic value using multistage fcff method : What it the estimated intrinsic value using the multistage FCFF method? State your answer as a dollar amount with two decimal places.
Estimated intrinsic value : A stock has a fairly stable dividend. It just paid a dividend of $0.66 and it has a stable dividend growth rate of 3.6% per year. If an investor's required retu
Prepare a budgeted quarterly income statement : Accounts receivable at December 31, 2021 are expected to be 8% of annual sales. Prepare a budgeted quarterly income statement and balance sheet
Explain the law of one price : The spot exchange rate is 1.1289 AUD per USD, the price of a Big Mac hamburger in the United States is US$ 4.62, and the price of a Big Mac hamburger in Austral
Finance for executive : A two-year corporate bond has a coupon rate of 4 percent. The 1-year spot rate is 3 percent and the forward rate is 5 percent. The bond's credit spread is 1 per

Reviews

Write a Review

Finance Basics Questions & Answers

  Current rate be on three-year treasury securities

If the unbiased expectations theory is correct, what should the current rate be on three-year Treasury securities?

  Explian how should devers respond to adkinss request

Do you think that separate warrants are a common thing or that we rarely see them? Explian how should Devers respond to Adkins's request?

  What is the npv of the art appreciation class

If you were to pay $1,000 for an art appreciation course that is expected to give you $200 per year in enjoyable benefits for 30 years and your opportunity cost

  Personal learning and professional development needs

How can employees address identified learning and professional development needs and what things should they take into consideration?

  What is the risk-free rate

a. What is the risk-free rate? b. What is the alpha of stock AAA? c. What proportion of the total risk of stock AAA is idiosyncratic?

  Importance of considering cash flows

Give some concrete examples of the differences between the two concepts that become important in capital budgeting.

  Determine the cash flow from the project

You are asked to check the feasibility of software development project. The initial development cost is $10M and the project will require an annual maintenance

  Describe the hr model proposed by ulrich

-Explain the difference between diversity and multiculturalism. Why do you think it is important to address both in HR?

  Determining a project cost of capital in a division

Suppose a firm has several divisions, each with a unique area of business. What role does the firm-wide weighted average cost of capital play when determining a project's cost of capital in a given division?

  Albert pujols hit 47 home runs in 2009 if his home -run

albert pujols hit 47 home runs in 2009.if his home -run output grew at a rate of 12 percent per year what would it have

  What is the residual income for each division

What is the residual income (RI) for each division if the minimum desired rate of return is: (a) 10 percent, (b) 15 percent, and (c) 20 percent?

  Will any project be chosen by a majority vote rule

Suppose there are five people-1, 2, 3, 4, and 5-who rank projects A, B, C, and D as follows.

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