What is an estimate of gunco price per share

Assignment Help Financial Management
Reference no: EM131998140

Gunco Industries invests a large sum of money in R&D; as a result, it retains and reinvests all of it earnings. In other words, Gunco does not pay any dividends and it has no plans to pay dividends in the near future. A major pension fund is interested in purchasing Gunco’s stock. The pension fund manager has estimated Gunco’s FCF for the next 4 years as follows: $7 million, $5 million, $12 million, and $18 million. After the forth year, FCF is projected to grow at a constant 5.5%. Gunco’s WACC is 10%, the market value of its debt and preferred stock totals $65 million, and it has 100 million shares of common stock outstanding. What is an estimate of Gunco’s price per share? You must show your work (your calculator inputs and math) to receive full credit.

Reference no: EM131998140

Questions Cloud

Patent from inventor in exchange for shares of stock : What is the effect of obtaining a patent from the inventor in exchange for shares of stock in Carlson Corp.?
What are the tax consequences of the recap : What are the tax consequences of the recap? How much of the new value will be euity?
Periodic inventory system-cost of purchases is recognized : In a periodic inventory system, the cost of purchases is recognized as
Companies with similar risk characteristics : Companies with similar risk characteristics and 40% debt can borrow at 9.5%. Would the company lower its WACC if it increased its debt to 40%?
What is an estimate of gunco price per share : Gunco Industries invests a large sum of money in R&D; as a result, it retains and reinvests all of it earnings. What is an estimate of Gunco’s price per share?
Design function with one parameter : Design a function with one parameter. The for loop will multiply the initial value of the parameter by 5 for 5 times.
What is the firm horizon or continuing and value : What is the firm's horizon, or continuing, value? How far away is the horizon date?
What is the current annual cost of employee base wages : What is the current annual cost of employee base wages? What is the current total annual cost of employee benefits?
What is the cash break-even point : What is the variable cost per unit? If the selling price is $46.00 per unit, what is the cash break-even point? If

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd