Free cash flows beyond year three discounted back

Assignment Help Financial Management

Reference no: EM132014864

Dantzler Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 4% rate. Dantzler's WACC is 11%. Year 0 1 2 3 ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ...... FCF ($ millions) - $20year1, $11 year 2, $52 year 3

a) What is Dantzler's horizon, or continuing, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55.

b) What is the firm's value today? Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round your intermediate calculations.

c) Suppose Dantzler has $107 million of debt and 11 million shares of stock outstanding. What is your estimate of the current price per share? Round your answer to two decimal places. Write out your answer completely. For example, 0.00025 million should be entered as 250.

Reference no: EM132014864

Questions Cloud

Explain the importance and relevance to hrm : Research the term BFOQR. Explain its importance and relevance to HRM. How might not appropriately incorporating well defined BFOQs lead to difficulties.

Positive emotional climate in the workplace : As a team member, what can one individual do to encourage a positive emotional climate in the workplace and use the strengths of work

What to do to determine why these goals were not met : The evaluation of company's diversity strategies found that the company did not meet its goals. What to do to determine why these goals were not met?

Discuss topic of restrictions on termination of employment : Research the topic of restrictions on termination of employment in European countries. Assess the different requirements and consider risks, operational.

Free cash flows beyond year three discounted back : Find the value of all free cash flows beyond Year 3 discounted back to Year 3.

Determine how to use data effectively : Research methods and which one would work best in an organization and determine how to use data effectively

Develop a mail merge documents using word : Develop a Mail Merge documents using Word for mailing out a newsletter with a cover note to a group of approximately 10 students.

Prepare a marketing plan of business idea : Prepare a Marketing Plan of that business idea which will only cover the 4Ps of the Marketing Mix that you also include your specific target market

Describe current and targeted hr work processes : Describe and analyze the current and targeted HR work processes as well as the respective knowledge, skills, and abilities (KSAs) required to achieve.

User Account

All Pages