Shares outstanding-estimate price per share of common stock

Assignment Help Financial Management

Reference no: EM13952139

ABC Waterhouse's free cash flow next year will be $250 million and it is widely expected to grow at a 5 percent annual rate indefinitely. The company's weighted average cost of capital is 11 percent, the market value of its liabilities is $2.5 billion, and it has 32 million shares outstanding.

Estimate the price per share of ABC's common stock.

a. $32.08

b. $52.08

c. $22.58

d. $25.85

Reference no: EM13952139

Questions Cloud

Assume the total cost of a college education : Assume the total cost of a college education will be $285,000 when your child enters college in 22 years. You presently have $35,000 to invest. What annual rate of interest must you earn on your investment to cover the cost of your child's college ed..

Relative advantages and disadvantages of these 3 approches : How would you ensure that a web page can be understood by viewers using different browsers which may not be able to interpret all content?

What is the marginal tax rate at this level of income : Redneck Farm Equipment owes $48,329 in tax on a taxable income of $549,600. The company has determined that it will owe $56,211 in tax if its taxable income rises to $565,000. What is the marginal tax rate at this level of income?

Proficient-level-compute the npv statistic for project : Proficient-level: Compute the NPV statistic for Project Y and tell [advise] whether the firm should accept or reject the project with the cash flows shown in the chart if the appropriate cost of capital is 12 percent. Project Y Time 0 1 2 3 4 Cash Fl..

Shares outstanding-estimate price per share of common stock : ABC Waterhouse's free cash flow next year will be $250 million and it is widely expected to grow at a 5 percent annual rate indefinitely. The company's weighted average cost of capital is 11 percent, the market value of its liabilities is $2.5 billio..

In common regarding the abolition of slavery : How does one of Nathaniel Hawthorne's stories provide a contrast to one of Ralph waldo Emerson's ideas? OR What do Thoreau, Stowe, and Douglass have in common regarding the abolition of slavery?

What is cultural responsiveness : What is cultural responsiveness? Identify an example of cultural responsiveness that you have observed in your personal or employment experiences

List three objectives of a company''s internal control system : List three objectives of a company's internal control system

What is functionalism? which side of the debate does : What is functionalism? Which side of the debate does Descartes fall on (with respect to the relation between mind and body)?

User Account

All Pages