The value of the hardware division

Assignment Help Financial Management

Reference no: EM13933436

The risk-free rate of interest is 3% and the market risk premium is 5%. Alpha Company’s hardware division has an asset beta of 1.4, a free cash flow of $450 million, and an expected growth rate of 4.0%. The value of the hardware division (in $millions) is closest to __________.

$4,500

$7,500

$8,750

$10,000

Reference no: EM13933436

Questions Cloud

Market capitalization is market value outstanding shares : The market portfolio contains more of the smallest stocks and less of the larger stocks. For the market portfolio, the investment in each security is proportional to its market capitalization. Market capitalization is the total market value of the ou..

Find a confidence interval : An experiment was conducted to compare the reaction times of a group of 10 volunteers (from a psychology class) to a bright light versus the sound of a loud air horn. Find a 95% confidence interval for µD = µX - µY .

Improvement of oil infrastructures : The near $100 oil price a barrel has enormously affected the U.S economy and has resulted from improvement of oil infrastructures. There has been a 9 percent or more oil contracts rise since January.

How a person might incorporate social cognition into future : A brief explanation of two ways to use social cognition to promote social change. Then, explain how a person might incorporate social cognition into their future practice or research.

The value of the hardware division : The risk-free rate of interest is 3% and the market risk premium is 5%. Alpha Company’s hardware division has an asset beta of 1.4, a free cash flow of $450 million, and an expected growth rate of 4.0%. The value of the hardware division (in $million..

What is the theoretical price of strike call : AIG stock sells at $61.21 and the 6-month 60-strike put is selling at $3.20. The risk-free rate is 4% and the stock will pay a dividend of $0.30 in 3 months. We assume that all options are European-style. What is the theoretical price of the 6-month ..

What are its tie ratio and return on invested capital : The H.R. Pickett Corp. has $500,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 10%. In addition, it has $700,000 of common stock on its balance sheet. It finances with only debt and common equity, so it has no prefer..

Prepare a trial balance to prove the equality : Prepare a trial balance to prove the equality of debits and credits.

Find the constant of integration : Find the constant of integration, C if: y = ò (9x2 + 2x - 9)dx and the curve passes through the point (2, 4)

User Account

All Pages