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1. EMC Corporation has never paid a dividend. Its current free cash flow of $540,000 is expected to grow at a constant rate of 5.5%. The weighted average cost of capital is WACC = 13.75%. Calculate EMC's estimated value of operations. Round your answer to the nearest dollar.
2. A company currently pays a dividend of $4 per share (D0 = $4). It is estimated that the company's dividend will grow at a rate of 15% per year for the next 2 years, and then at a constant rate of 6% thereafter. The company's stock has a beta of 1.2, the risk-free rate is 7.5%, and the market risk premium is 4%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent.
Evaluating current and planning for the future is considered what finance activity?
Oregon Forest Products will acquire new equipment that falls under the five-year MACRS category. The cost is $240,000. If the equipment is purchased, the following earnings before depreciation and taxes will be generated for the next six years. Calcu..
A six-year annuity of $8500 quarterly payments will begin 9 years from now. The discount rate is 9%, compounded quarterly. How much is this annuity worth 5 years from now? How much is this annuity worth 2 years from now? How much is this annuity wort..
In project valuation, one of the advantages of the Payback rule is that it provides a simple way to communicate an idea of project profitability.
Paccar’s current stock price is $48.20 and it is likely to pay a $0.80 dividend next year. Since analysts estimate Paccar will have an 8.8 percent growth rate, what is its required return?
what is the corresponding effective rent when evaluated from the tenant's perspective?
Zombie Corp. has a profit margin of 4.7 percent, total asset turnover of 2.1, and ROE of 19.24 percent. What is this firm’s debt-equity ratio? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.) Debt..
What is the value of a bond that has a par value of $1,000, a coupon rate of 8.21 percent (paid annually), and that matures in 13 years? Assume a required rate of return on this bond is 9.34 percent.
The average collection period is 45 days. Determine the annual financing cost to Titusville of this receivables-backed loan.
Consider a firm that had been priced using a 12.5 percent growth rate and a 14.5 percent required return. The firm recently paid a $2.20 dividend. The firm has just announced that because of a new joint venture, it will likely grow at a 13.0 percent ..
An electric utility is considering a new power plant in northern Arizona. Power from the plant would be sold in the Phoenix area, where it is badly needed. Because the firm has received a permit, the plant would be legal; but it would cause some air ..
Calculate the sensitivity of the OCF to changes in the quantity sold.
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