New millenium free cash flow last year

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New Millenium Company earned $2.9million in net income last year. It took depreciation deductions of $298,000 and made new investments in working capital and fixed assets of $95,000 and $343,000, respectively.

a. What was New Millenium's free cash flow last year?

b. Suppose that the company's free cash flow is expected to grow at 4%per year forever. If investors require a return of 7% on Millenium stock, what is the present value of Millenium's future free cashflows?

c. New Millenium has 3.2million shares of common stock outstanding. What is the per-share value of the company's common stock?

d. What is the company's P/E ratio based on last year's earnings(i.e., trailing earnings)?

e. What is the company's P/E ratio based on next year's earnings(assuming that earnings grow at the same rate as free cashflow).

Reference no: EM131455655

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