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Total value of equity of sindhuh enterprises

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Reference no: EM133057557

Use the following information for the next three questions:

EPS for 2002 is $2.60

Vishal Noronha needs to prepare a valuation for Sindhuh Enterprises. Noronha has collected the following information for his analysis. It is now the first day of 2003.

  • EPS will increase at the following declining growth rates over the next 5 years (2003-2007): 30%, 18%, 12%, 9%, 7%.
  • Net investment in fixed capital (net of depreciation) per share are as follows: 3.00, 2.50, 2.00, 1.50, 1.00.
  • Net investment in WC each year will be 50% of the net investment in fixed capital.
  • 30% of the net investment in fixed capital and working capital will be financed by new debt financing.
  • Current market conditions dictate a risk-free rate of 6%, an equity risk premium of 4%, and a beta of 1.10 for Sindhuh

1. The total value of equity of Sindhuh Enterprises for the year 2002 is equal to _______.

a. $110.56

b. $110.56

C. $87.36

d. $78.73

Reference no: EM133057557

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