Firm has no preferred stock on balance sheet

Assignment Help Financial Management

Reference no: EM131909668

Assume today is December 31, 2016. Barrington Industries expects that its 2017 after-tax operating income [EBIT(1 – T)] will be $410 million and its 2017 depreciation expense will be $60 million. Barrington's 2017 gross capital expenditures are expected to be $110 million and the change in its net operating working capital for 2016 will be $20 million. The firm's free cash flow is expected to grow at a constant rate of 4.5% annually. Assume that its free cash flow occurs at the end of each year. The firm's weighted average cost of capital is 8.5%; the market value of the company's debt is $2.6 billion; and the company has 180 million shares of common stock outstanding. The firm has no preferred stock on its balance sheet and has no plans to use it for future capital budgeting projects. Using the free cash flow valuation model, what should be the company's stock price today (December 31, 2016)? Round your answer to the nearest cent. Do not round intermediate calculations.

Reference no: EM131909668

Questions Cloud

Find the value of the canadian dollar in euros : Assume the Canadian dollar is equal to $.75 and the U.S. Dollar is equal to 1.35 Euro. What is the value of the Canadian dollar in Euros?

Define what the food chains : The energy flow in the ecosystem follows certain organized order called food chain. Define what the food chains.

Find the highest level of fixed costs : Assuming that the price per carton is $17.30, find the highest level of fixed costs you could afford each year and still break even.

Discuss which police responses you would employ and why : Assignment - Classify each of the following patterns by pattern type. Then, discuss which police responses you would employ and why

Firm has no preferred stock on balance sheet : The firm has no preferred stock on its balance sheet and has no plans to use it for future capital budgeting projects.

Define what the food chains : The energy flow in the ecosystem follows certain organized order called food chain. Define what the food chains.

Explain how often you engage with or witness death in work : How often do you engage with or witness death in your work? How has this experience or the lack of it shaped your view of death?

Behavior in the micro-economics issues : State the basic postulates of consumer behavior in the micro-economics issues?

Find poll and discuss margin of error related to the article : Many times when hearing on the news or reading about a poll results, you will hear the margin or error. Find a poll and discuss the margin of error related.

User Account

All Pages