Forecasting cash flows, Your company is forecasting cash

Forecasting cash flows

Assignment Help Financial Management

Reference no: EM13763217

Your company is forecasting cash flows of $15 million next year, $25 million in year 2 and $40 million in year 3. After that growth in cash flows is expected to level out at 5% per year. Your company has $150 million in marketable securities and $350 million in interest bearing debt. If the cost of capital is 10% and there are 10 million shares outstanding what is the price per share of stock?

Reference no: EM13763217

Questions Cloud

What is the fair price of megadebt stock : MegaDebt Corp. just issued a dividend of $0.85. The firm pays quarterly dividends. The dividends are expected to grow at 0.2 percent each quarter. The shareholders ask for a return of 5.25 percent each year. What is the fair price of MegaDebt stock? ..

Bond and company pays a semi-annual interest : When originally issued, the bonds were sold for $960 per bond; today their current market price is $1,065 per bond and company pays a semi-annual interest of $45 per bond. If an investor purchases a bond 10 years ago when the bond was first issued an..

What is the rate of return received by the investor : If an investor purchases a bond 10 years ago when the bond was first issued and sold the bond today, what is the rate of return received by the investor? When originally issued, the bonds were sold for $960 per bond; today their current market price ..

Required rate of return on the bond : What is the value of a 10 percent annual coupon, $1,000 par value bond with 20 years to maturity if the required rate of return on the bond is 12 percent?

Forecasting cash flows : Your company is forecasting cash flows of $15 million next year, $25 million in year 2 and $40 million in year 3. After that growth in cash flows is expected to level out at 5% per year. Your company has $150 million in marketable securities and $350..

Oil powered generator with a solar power generator : Georgia Power is contemplating replacing an oil powered generator with a solar power generator. The old generator was purchased 22 years ago and is being depreciated over its 25 years life to a zero salvage value using straight-line depreciation. The..

Tax return claiming : Taylor and Jordan are married and file a joint tax return claiming their two children, ages 12 and 9 as dependents. Their AGI for 2014 is $100,000. Taylor and Jordan's child tax credit for 2014 is:

Stephen plans to purchase a car : Stephen plans to purchase a car 7 years from now. The car will cost $67,989 at that time. Assume that Stephen can earn 7.37 percent (compounded monthly) on his money. How much should he set aside today for the purchase?

When a firm issues securities to the public : When a firm issues securities to the public for the very first time, these are generally under-priced. Explain why.

User Account

All Pages