What is the intrinsic value of common equity per share

Assignment Help Financial Management

Reference no: EM13943605

A firm has free cash flow of $500,000 on their most recent financial statements. The firm expects the FCF’s to grow at about 2.5% per year. The cost of capital for the firm is 10.50%. The firm’s financials also revealed that the firm has marketable securities valued at $0.75 million as well as total debt of $1 million and preferred stock totaling $250,000. The firm has total assets of $8 million and sales of $4.5 million. If the firm has 400,000 shares outstanding and 500,000 shares authorized, what is the intrinsic value of common equity per share?

Reference no: EM13943605

Questions Cloud

Tax considerations and their effect on mergers-acquisitions : What are the tax considerations and their effect on mergers and acquisitions? What effect do mergers and acquisitions have on future financial performance? Is there a balance sheet and income statement effect; if so what is/are they? What effect does..

Cost of equity capital under the proposed restructuring : Ngala Ltd. currently has no debt in their capital structure. They are considering recapitalizing the firm and adding about 25% debt. The loan requires an interest rate of 7%. The firm is in the 35% tax bracket. Currently, the firm has a beta of 1.02...

Compare and contrast the federalist and democratic : Compare and contrast the Federalist and Democratic-Republican attitudes toward the national government. Include a clear discussion of the differences their leaders held.

Hayley reinvests the annual dividend : Hayley recently invested $60,000 in a public utility stock paying a 3 percent annual dividend. If Hayley reinvests the annual dividend she receives net of any taxes owed on the dividend,

What is the intrinsic value of common equity per share : A firm has free cash flow of $500,000 on their most recent financial statements. The firm expects the FCF’s to grow at about 2.5% per year. The cost of capital for the firm is 10.50%. what is the intrinsic value of common equity per share?

Determine the amount of the annual depreciation : Your firm is considering a new three-year project with unit sales expected to be 10,000 per year. They expect the unit sale price to be $15 with variable costs accounting for $8.25 per unit. Fixed costs are estimated to be $15,500 per year. Determine..

Morgan furniture company on an account : Master Designs Decorators issued an 180-day, 4% note for $76,800, dated May 14, 2016, to Morgan Furniture Company on an account.

The net community benefit expense : A hospital incurs $10 million of cost to treat Medicaid patients and receives $7 million in payment. Actual charges for these Medicaid patients were $20 million. The net community benefit expense that would be reported in Schedule H of IRS Form 990 w..

Saving for retirement : You want to begin saving for retirement. You expect to retire in about 45 years. You are confident you can maintain a contribution of $200 into a retirement account each month. The account earns an APR of 3.6%, compounded quarterly. a. How much will ..

User Account

All Pages