What is the firms projected free cash flow for the year

Assignment Help Financial Management

Reference no: EM131489107

Stilley Corporation had earnings after taxes of $458,000 in 20X2 with 200,000 shares outstanding. The stock price was $47.10. In 20X3, earnings after taxes declined to $228,000 with the same 200,000 shares outstanding. The stock price declined to $33.30.

a. Compute earnings per share and the P/E ratio for 20X2. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

Earnings per Share=

P.E. Ratio _____________ times

b. Compute earnings per share and the P/E ratio for 20X3. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

Earnings per share=

P.E Ratio ____________ times

Nova Electrics anticipates cash flow from operating activities of $14 million in 20X1. It will need to spend $9.5 million on capital investments to remain competitive within the industry. Common stock dividends are projected at $2.10 million and preferred stock dividends at $1.35 million.

a. What is the firm’s projected free cash flow for the year 20X1? (Enter your answer in millions of dollars rounded to 2 decimal places.)

Free cash flow= _______ million

b. What does the concept of free cash flow represent?

Free cash flow represents the funds that are available for investing activities, such as purchasing plant and equipment assets.

Free cash flow represents the funds that are available for special financing activities, such as a leveraged buyout.

Free cash flow equals cash flow from operating activities.

Reference no: EM131489107

Questions Cloud

Merger valuation with change in capital structure : What is the Year-4 interest expense? What is the Year-4 tax shield? What is the unlevered value of operations? What is the value of the tax shield?

Prepare the acquisition analysis and consolidation worksheet : ACC2100 / ACF2100 Financial Accounting Semester One 2017 Individual Assignment. Prepare the acquisition analysis and consolidation worksheet entries

Reasonable forecast of rate on one year treasury securities : what is a reasonable forecast of the rate on 1-year Treasury securities next year?

Discuss the proposed food label changes outlined : Discuss the proposed Food Label changes outlined in the Textbook, explaining how the changes would help consumers understand food labels more effectively.

What is the firms projected free cash flow for the year : Compute earnings per share and the P/E ratio for 20X2. What is the firm’s projected free cash flow for the year 20X1?

Identify the main issues in the chosen area : The Reflective Paper must: identify the main issues in the chosen area and demonstrate new learning that has occurred.

Conduct a values and risk audit of an organisation : In this assessment, you are asked to conduct a values and risk audit of an organisation with which you have had some association

What is the forward premium on the dollar in percent : What is the forward premium on the dollar in %?

What is the flotation cost adjustment : What is the flotation cost adjustment that must be added to its cost of retained earnings?

User Account

All Pages