User Account

All Pages

Historical geometric growth rate

Assignment Help Finance Basics
Reference no: EM133111767

USD

2021 Est.

2020

2019

2018

2017

2016

2015

2014

2013

2012

CFO1

2,119

3,278

3,960

3,718

3,346

3,386

2,332

2,792

2,562

2,206

BV1

12,319

11,720 

11,132 

11,159 

  11,712 

10,219 

   9,117 

    8,673 

    9,639 

9,458

Cash return on equity

17.2%

28.0%

35.6%

33.3%

28.6%

33.1%

25.6%

32.2%

26.6%

23.3%

Interest1

75

 

 

 

 

 

 

 

 

 

CE1

1,559

 

 

 

 

 

 

 

 

 

Common shares1

302.6

 

 

 

 

 

 

 

 

 

1 In millions

The historical geometric growth rate using regression smoothing of CFO is 3.0% which is expected to continue in the future.  The market value of the company's debt is USD 5,716.0 million at the end of 2021.

Hint:  When calculating FCFF, use the formula FCFF = CFO + (I)(1 - TR) - CE to estimate FCFF initially and then grow it using a one-stage model and the long-term term rate above.  Remember that the market value of the firm's debt must be deducted to get the market value of equity which is used to determine the value of the share.  Apply historical average historical cash return on equity to normalized CFO as 2021 is an outlier due to COVID 19.

Reference no: EM133111767

Questions Cloud

Npv of the divestiture : Fetco Co. (a U.S. firm) has a subsidiary in Germany that generates substantial earnings in euros each year. It will soon decide whether to divest the subsidiary
Explain the investor optimal portfolio : Consider two stocks, A and B, and a risk-free asset Rf. Stock A has a higher expected return and a higher standard deviation than stock B. Investor 1's optimal
Implement the remote access to the virtual machine : Different modes of operation/prompts that you used in the course of the labs and the commands that can be used to change between them
Ideal financial plan : 1. An ideal financial plan should have:
Historical geometric growth rate : The historical geometric growth rate using regression smoothing of CFO is 3.0% which is expected to continue in the future. The market value of the company's d
Calculate the return required by shareholders : Calculate the return required by shareholders as a result of this redemption.
Profitability with exercise of the early repayment clause : Gamma has just issued a five-year bond with an early redemption clause (early redemption price equal to par). The coupon rate is 7%. Early redemption will be po
Demonstrating effectiveness of cutlers preventive programs : What methods might prove helpful in demonstrating the effectiveness of Cutlers preventive programs and How might a more effective evaluation program
Estimate of the stock price today : Wally wants your advice on a potential stock purchase. There is excess capital on the balance sheet - and he wants to put it to good use. He is excited because

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd