User Account

All Pages

What is the value of company

Assignment Help Finance Basics
Reference no: EM132081280

You are valuing a company today, using the FCF valuation method. The company's most current cash flow is 135 million, and you forecasted the free cash flows for the next 4 years in the table below. You estimate that the company will grow at the same rate as its industry, 3.5%, after 2021 indefinitely. If the cost of capital is 10%, what is the value of this company?

Year FCF (Million)

2018 165

2019 185

2020 235

2021 255

3426.92 million

3789.46 million

5871.79 million

4610.06 million

4823.96 million

Reference no: EM132081280

Questions Cloud

Purchasing an australian government bond : An investor purchasing an Australian Government Bond is entitled to receive annual payments from the Australian government forever
Determine necessary consideration for building your program : Displays a list of animal/habitat options (based on the previous selection) as read from either the animals or habitats file.
Share of common stock be selling for in the market : The company has a dividend payout ratio of 50%, book value per share of $33.5 and a P/E ratio of 15. What should one share of common stock
Identify at least one candidate key : Identify at least one candidate key. If there are no candidate keys, give an example of an attribute that could be used as a candidate key.
What is the value of company : If the cost of capital is 10%, what is the value of this company?
Write a program that finds the smallest word and largest : Write a program that prompts for your first name and then last name. Enter them respectively and make your full name and output it.
The art of cinematography : To create an effective designed, the director, cinematographer, and production designer need to work together
What is the company current stock price : The company's beta is 1.65, the market risk premium is 8.5%, and the risk-free rate is 5.50%. What is the company's current stock price?
What was his return on invested capital : How much money did Mark make? What was his return on invested capital, given that the initial margin was 12.50%?

Reviews

Write a Review

Finance Basics Questions & Answers

  What are the after-tax cash flows for the project

Assume a project has earnings before depreciation and taxes of $10,000, depreciation of $40,000, and that the firm has a 30 percent tax bracket. What are the after-tax cash flows for the project?

  Define the terms preferred stock and common stock

Bad Boys, Inc. is evaluating its cost of capital. Under consultation, Bad Boys, Inc. expects to issue new debt at par with a coupon rate of 8% and to issue.

  How can you reduce risk using diversification technique

What is risk? How do you quantify risk? Discuss different types of risk. In finance literature, it is widely accepted that diversification reduces risk.

  Minimum annual rate

Karen wants to invest $750 per quarter for a period of 25 years in order to accumulate a value of $120,000. What minimum annual rate (compunded quarterly) would Karen need to receive to reach her goal? You may solve this by graphing or trial and e..

  Calculating the effective cost of short term credit

Professors Note: Your answer is close but incorrect.  Please review "calculating the effective cost of short term credit" in your text.  You need to make sure that the note amount is the NET amount (what Worthington actually receives after costs/i..

  What would you pay for an annuity of 2000 paid every six

what would you pay for an annuity of 2000 paid every six months for 12 years if you could invest your money elsewhere

  What is the cost of equity capital for vwx

Explain homemade leverage and why it matters. What is the cost of equity capital for VWX? Using the M&M Proposition I with taxes, calculate the value of the firm at each debt level.

  Initial fixed asset investment

A project will produce an operating cash flow of $14,600 a year for 8 years. The initial fixed asset investment in the project will be $48,900

  Solutions to quiz 2

Solutions to Quiz 2 are after the questions. Consider two bonds, A and B. Both bonds presently are selling at their par value of $1,000. Each pay interest of $120 annually. Bond A will mature in 5 years while bond B will mature in 6 years. If the yie..

  Determine the required after-tax refunding investment

new york waste nyw is considering refunding a 50000000 annual payment 14 coupon 30-year bond issue that was issued 5

  Based on the information below calculate the weighted

based on the information below calculate the weighted average cost of capital.great corporation has the following

  Computation of investment bid price at given cost of capital

Computation of investment bid price at given cost of capital and you will also need an initial investment in net working capital of $75,000

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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