What is wards estimated intrinsic value per share

Assignment Help Finance Basics
Reference no: EM13289509

Ward Pharmaceuticals is expected to generate free cash flow (FCF) of $150 million this year (FCF1 = $150 million), and FCF is expected to grow at a rate of 20% over the following two years (FCF2 and FCF3). After the third year, however, FCF is expected to grow at a constant rate of 5% per year, forever (FCF4).

1) If Ward's weighted average cost of capital (WACC) is 10.9%, what is Ward's current total firm value?

2) Ward's debt has a market value of $1,800 million and Ward has no preferred stock. If Ward has 80 million shares of common stock outstanding, what is Ward's estimated intrinsic value per share of common stock?

 

Reference no: EM13289509

Questions Cloud

What is the variance of the returns on rtf : The probability of a boom is 63 percent while the probability of a recession is 37 percent. What is the variance of the returns on RTF, Inc. stock?
Explain the system and its internal energy : An 80.0-gram sample of a gas was heated from 25 °C to 225 °C. During this process, 346 J of work was done by the system and its internal energy increased by 6275 J. What is the specific heat of the gas
Design a digital notch filter to reject frequency completely : Design a digital notch filter to reject frequency 5 kHz completely and to have a sharp recovery on either side of 5 kHz to a gain of unity. The highest frequency to be processed is 20 kHz.
What is the width of the patterns central maximum : You illuminate a slit of width 0.0667 mm with light of wavelength 721 nm, What is the width, in centimeters, of the pattern's central maximum
What is wards estimated intrinsic value per share : Ward's debt has a market value of $1,800 million and Ward has no preferred stock. If Ward has 80 million shares of common stock outstanding, what is Ward's estimated intrinsic value per share of common stock?
What is the 95 percent probability range : A stock has returns of 4 percent, 18 percent, -24 percent, and 17 percent for the past 4 years. Based on this information, what is the 95 percent probability range for any one given year?
What is the number of bytes the ram can store : An 8 - bit microcontroller has an external RAM with the memory map from 8000H to 9FFFH. what is The Number of bytes this RAM can store
Determine the potential difference between the points : Consider a ring of radius R with the total charge Q spread uniformly over its perimeter. What is the potential difference between the point at the center of the ring and a point on its axis a distance 2R from the center
What is the current price of the common stock : The company's last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock?

Reviews

Write a Review

Finance Basics Questions & Answers

  Benefits of international capital markets

What are some benefits of the international capital markets? does borrowing a portfolio of currencies offer any possible advantages over the borrowing of a single foreign currency?

  Should the mangement pursue this reduction in debt

The issuance of $5,000,000 in common equity and repurchase of debt in that same amount is expected to result in the reduction in kd to 7%. The impact of the action on the cost of equity is to be established. Should the mangement pursue this reduct..

  Determine present price of stock

Before two years, General Materials and standard Fixtures' stock price were the same Over the first year, General Materials' stock price increased by 10 percent while Standard Fixture's price decreased by 10 percent.

  Compute the ear

You have found three investment choices for a one -year deposit: 10 %APR compounded monthly, 10 percent APR compounded annually , and 9 percent compounded daily.

  Role of economic value and replacement value

Critically evaluate these comments. Please don't wander; concentrate on the issues stated by quotation.

  Detailed explanation to time value of money

Choose two other companies in same industry. One should be one which you would pay less for a $2,000 bond than you would from Under Armour, Inc and another one that you would pay more for a $2,000 bond from Under Armour, Inc. Would pay more or less..

  Systems development life cycle

Use Systems Development Life Cycle to explain how would introducing a new payment technologies affect an organisations?

  What is the maximum that should be paid to replace

A used machine costs$100,000 annually to run. What is the maximum that should be paid to replace the machine with one that will last 3 years and cost only $4,000 annually to run? The opportunity cost of capital is 12%

  Compute depreciation charge

Pemberton Corporation bought a machine costing $300,000 that had an estimate useful life of 6-years and residual value of $18,000. The machine is expected to produce 3,525,000 units during its useful life;

  Calculation of projected cash flows and net present value

Calculation of projected Cash flows and Net Present Value and Compute the necessary calculations and How does this information affect your recommendation

  Money-bond-stock and mortgage markets

The critical importance of money, bond, stock and mortgage markets as potential investment options is highlighted in terms of their impact on financial sector. Describe the linkages between each market, and how investors' choices would be affected.

  What is the benefit to the firm

What is meant by saying debt is tax-favored? What is the benefit to the firm? What are the risks?

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