Share of strawberry tech stock without the tablet line

Assignment Help Financial Management

Reference no: EM131887207

Strawberry Tech expects net cash flows of $100,000 by the end of this year. Net cash flows will stay the same if the firm makes no new investments. Now the frim has the opportunity to add a line of tablet computers to the business. The immediate outlay for this opportunity is $100,000, and the net cash flows from the line will being one year from now. The tablet business will generate $32,000 in additional net cash flows. These net cash flows will grow at 5%. The firm's discount rate is 15%, and 200,000 shares of Strawberry Tech stock are outstanding.

a) What is the price per share of Strawberry Tech stock without the tablet line?

b) What is the value of the growth opportunities that the tablet line offers?

c) Once Strawberry Tech adds the tablet line, what is the price of Strawberry Tech stock?

Reference no: EM131887207

Questions Cloud

What are the main processes in project quality management : How do functional., system outputs, performance, reliability, and maintainability requirements affect quality planning?

You have the right to buy using the convertible bond : The conversion ratio is also the number of shares you have the right to buy using the convertible bond.

Is requested master calendar submitted with FIXED activities : "Time management is the managing of your time so that time is used to your advantage and it gives you a chance to spend your most valuable resource.

Which gases are greenhouse gases : Which gases are greenhouse gases (absorb infrared radiation) and have dramatically increased because of human activities?

Share of strawberry tech stock without the tablet line : What is the price per share of Strawberry Tech stock without the tablet line?

Brief description of a current or historic public health : How would, or do, your examples of public health affect people in other, less developed, countries? Provide an example to illustrate your point.

Expected rate of return on sel subordinated debenture bond : Calculate the expected rate of return on SEL subordinated debenture bond.

Pilot effective weight : Calculate also the 72 kg pilot's effective weight (the force with which the seat pushes up on him) at the bottom of the circle.

How is e-commerce related to decision support : What are the benefits of each system, under what circumstances would you use one over the other, and how does the Internet play a role in decision support?

User Account

All Pages