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Assume today is December 31, 2013. Barrington Industries expects that its 2014 after-tax operating income [EBIT(1 – T)] will be $450 million and its 2014 depreciation expense will be $70 million. Barrington's 2014 gross capital expenditures are expected to be $100 million and the change in its net operating working capital for 2014 will be $30 million. The firm's free cash flow is expected to grow at a constant rate of 6.5% annually. Assume that its free cash flow occurs at the end of each year. The firm's weighted average cost of capital is 8.8%; the market value of the company's debt is $2.45 billion; and the company has 190 million shares of common stock outstanding. The firm has no preferred stock on its balance sheet and has no plans to use it for future capital budgeting projects. Using the free cash flow valuation model, what should be the company's stock price today (December 31, 2013)? Round your answer to the nearest cent. Do not round intermediate calculations.
A stock has an expected return of 15 percent, its beta is 1.35, and the expected return on the market is 13 percent. What must the risk-free rate be? (Do not round your intermediate calculations.)
Skiffertons , an investment banking firm bas proposed two types of payment plans for the IPO being considered by Dakota Drilling, a manufacturer of oil drilling equipment. The first is a firm commitment of E5,000,OOO.
what is the required return? What is the dividend yield? What is the expected capital gains yield?
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Warnock Inc. is considering a project that has the following cash flow and WACC data. What is the project’s NPV? Note that a project’s projected NPV can be negative, in which case it will be rejected. WACC: Year 10.00% 0 1 2 3 Cash flows −$950 $50 $4..
Calculate ABC Company Earning per share (EPS). Calculate the shares have been purchased with the proceeds from the options
What is your estimate of the current value of the stock price using a two-stage DDM
When looking at multinational corporations frequently the concerns of the parent company and the subsidiary are at odds.
It can be difficult to accurately forecast a project's cash flows because many risk factors may be present. As an analyst, what will you do to increase the accuracy of the project's cash flow forecasts? Some firms use more debt in their capital struc..
You are looking to buy a car. You can afford $540 in monthly payments for four years. In addition to the loan, you can make a $1,900 down payment. If interest rates are 9.25 percent APR, what price of car can you afford? A loan is offered with monthl..
What is the gross development profit margin for a going in cap rate of 10 and a selling cap rate of 7
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