What will be the equity value of the firm

Assignment Help Financial Management

Reference no: EM131079522

Company A’s current free cash flow is $2 dollars and forecasts its FCFF to grow at 0% for 2 years, then 10% for 2 years, then at 5% forever. The firm is consisted of 100% equity and has no debt. If the company’s beta is 1.5, the risk free rate is 2% and the market return is 10%. What will be the equity value of the firm today using DCF model?

Reference no: EM131079522

Questions Cloud

Slope of the isoquant when the entrepreneur : In the production function Q = 10L1/2K1/2calculate the slope of the isoquant when the entrepreneur is producing efficiently with 9 laborers and 16 units of capital.

Profitability ratio and net present value : You have been asked to consider a project with the following characteristics: Internal rate of return: 11.63% Profitability ratio: 1.04 Net present value: $987 Payback period: 2.98 years Which of the following statements is correct given this informa..

Draw a graph of the function for -4p= t= 4p : Draw a graph of the function for -4π≤ t≤ 4π and obtain its Fourier series expansion.

Elasticity of demand of the accord : Suppose the annual demand function for the Honda Accord isQd= 430 - 10PA+ 10PC- 40PG, wherePAandPCare the prices of the Accord and the Toyota Camry respectively (in thousands), and P Gis the price of gasoline (per litre).

What will be the equity value of the firm : Company A’s current free cash flow is $2 dollars and forecasts its FCFF to grow at 0% for 2 years, then 10% for 2 years, then at 5% forever. The firm is consisted of 100% equity and has no debt. If the company’s beta is 1.5, the risk free rate is 2% ..

Elements of capitalist in the us economy : The United States is best described as having a "mixed economy". What are some elements of capitalist in the US economy? command elements in our economy? and some elements of tradition?

What is the current market price of these bonds : Jackson Corporation's bonds have 5 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 11%. The bonds have a yield to maturity of 8%. What is the current market price of these bon..

The internal rate of return : The internal rate of return

Debt versus equity financing : You are considering a stock investment in one of two firms (AllDebt, Inc., and AllEquity, Inc.), both of which operate in the same industry and have identical operating income of $7.00 million. Calculate the income available to pay the asset funders ..

User Account

All Pages