What is your estimate of the company stock price

Assignment Help Financial Management
Reference no: EM132001586

Hawley Corp. had sales of $95 million for the current year. Costs were $57 million, and net investment was $12 million. Each of these is expected to grow at 13 percent next year, with the growth rate declining by 2 percent per year until the growth rate reaches 5 percent. There are 7.75 million shares of stock outstanding and investors require a return of 11 percent return on the company’s stock. To estimate the terminal value, you feel that the PE ratio is most appropriate and the correct PE multiple is 14. The corporate tax rate is 35 percent. What is your estimate of the company’s stock price?

Reference no: EM132001586

Questions Cloud

Existing sources of data created by others : 1. Ne w sources of data designed for your purposes are 2. Existing sources of data created by others for different purposes are
What is the minimum new cash flow : What is the minimum new cash flow that the company would require to undertake the expansion?
What is the monthly deposit into the sinking fund : What is the monthly deposit into the sinking fund?
Draw a time line to show the cash flows of the project : The SL High Tech is planning a new investment project which is expected to yield cash inflows of $395,000 per year in Years 1 through 3, $286,000.
What is your estimate of the company stock price : Hawley Corp. had sales of $95 million for the current year. The corporate tax rate is 35 percent. What is your estimate of the company’s stock price?
Make the project acceptable to the company : What is the minimum probability of success that will make the project acceptable to the company?
What is the mirr of the sports facility : If the appropriate reinvestment rate for the sports facility is 11.5?%, what is the MIRR of the sports facility? What is the MIRR of the restaurant?
What is the probability that 2 or more : What is the probability that 2 or more would have an IQ greater than 140. Represent your solution as an expression of ?=p(IQ>140) and give ?.
Discuss about the network connections : Revise your previous week's Playbook/Runbook based on your facilitator's feedback and submit as a complete document.

Reviews

Write a Review

Financial Management Questions & Answers

  Consider portfolio manager who owns the bond portfolio

Consider a portfolio manager who owns the following bond portfolio (all bonds pay interest semiannually).

  What is the value of the yen in fijian dollars

A Japanese yen is worth $.0080, and a Fijian dollar (F$) is worth $.5900. What is the value of the yen in Fijian dollars

  What will be your new mortgage payment

Your bank has offered you a $250,000 mortgage at 4% for a 5-year term and a 25-year amortization. At renewal time, you decide to repay the remaining balance in 10 years. Assume your mortgage stays the same, what will be your new mortgage payment?

  Marginal? cost-benefit analysis

Marginal? cost-benefit analysis and the goal of the firm Ken? Allen, capital budgeting analyst for Bally? Gears, Inc., has been asked to evaluate a proposal.

  Using the traditional-six-step risk management process

Using the traditional, six-step Risk Management Process, go through the process using CSU-Global as your model company.

  1 a common stock will have a price of either 85 or 35 in 2

1. a common stock will have a price of either 85 or 35 in 2 months. a two month put option on the stock has a strike

  What is required rate of return

What stock price is expected 1 year from now? What is the required rate of return?

  What will the year two cash flows for this project be

You are evaluating a product for your company. You estimate the sales price of product to be $110 per unit and sales volume to be 10,100 units in year 1; 25,100 units in year 2; and 5,100 units in year 3. The project has a 3 year life.  The tax rate ..

  Debt-to-assets ratio assuming the firm uses only debt

Ratio Calculations Assume the following relationships for the Brauer Corp.: Sales/total assets 1.4x Return on assets (ROA) 4% Return on equity (ROE) 13% Calculate Brauer's profit margin assuming the firm uses only debt and common equity. Round your a..

  What is the project year four cash flow

Revenues and other operating costs are expected to be constant over the project's 10-year expected operating life. What is the project's Year 4 cash flow?

  Calculate wacc based on book-market-target capital structure

Bolster Foods (BF) balance sheet shows a total of $25 million long-term debt with a coupon rate of 7.5%. The yeild to maturity on this debt is 7.00% and the debt has a total current market value of $25,875,000. Calculate WACCs based on book, market, ..

  Minimum cash on hand requirements

Rework Problem 1 assuming minimum cash on hand requirements are $10,000 a month through May, increase to $15,000 in June and July, increase further to $20,000 in August and September, and return to the $10,000 per month level beginning in October.

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