9. Free cash flow valuation of stock.ALD Inc. is a growing firm with free cash flows increasing by 15 percent for the first two years and 10 percent for the next three years. After that period, the rate of growth of the cash flows will stabilize at 5 percent annually for the foreseeable future. Last year the cash flows were $11.2 million. The company has $40 million cash on its balance sheet and $100 million debt. Estimate the stock price if there are 100 million outstanding shares. The average cost of capital for the firm is 8 percent.

ABC Company is growing very rapidly.  It expects to pay a dividend of $2.35 per share at the end of this year.  The dividend is then expected to grow at 18% for two years, then settle down to a long run growth rate of 8% per year each year thereafter.  If investors require a 17% return to hold the common stock, what price per share would you expect to pay today? Select one: a. $30.81 b. $25.18 c. $23.48 d. $29.04 e. $28.06

Proper steps so I can understand concept

Assume that the average firm in C&J Corporation's industry is expected to grow at a constant rate of 7% and that its dividend yield is 8%. C&J is about as risky as the average firm in the industry and just paid a dividend (Do) of $1.5. Analysts expect that the growth rate of dividends will be 50% during the first year (90,1 = 50%) and 25% during the second year (91,2 = 25%). After Year 2, dividend growth will be constant at 7%. What is the required rate of return on C&J's stock? What is the estimated intrinsic price per share? Do not round intermediate calculations. Round the monetary value to the nearest cent and percentage value to the nearest whole number. rs: Po: $ 61 40.18 %

You see a fast growing company that is estimated to have dividend growth of 18%, 16%, and 14% over each of the next three years (18% in year 1, 16% in year 2, 14% in year 3). The company paid a dividend of $2.25 per share over the past 12 months. Dividends are expected to grow at a constant rate of 3.0% per year beginning in year 4 to perpetuity. The risk-free rate of return is 4% and the market risk premium is 6%. The stock has a beta of 1.20 versus the S&P 500. Calculate the intrinsic value of this stock using the two-stage dividend discount model. $30.55 $35.11 $39.50 $34.36

A company is projected to generate revenues of $336 million and $406 million over the next two years. After that, the company is assumed to enter its terminal phase with steady growth. Given the following information, how much is each share worth today? Answer in dollars rounded to one decimal place. Forecasted operating margin: 35.4%. Forecasted tax rate: 22.2%. Forecasted reinvestment rate: 30%. Forecasted steady growth rate of free cash flow: 1.3% per year. Cost of capital: 13.2%. Debt: $40 million. Cash: $35 million. Shares outstanding: 12 million.

GMC is growing quickly. Dividends are expected to grow at a rate of 6 percent for the next three years, with the growth rate declining to a constant 2 percent thereafter. If the required return is 10 percent for the first two years and then 8 percent thereafter. The company just paid a dividend of $4, what is the current share price?     A. $62.00   B. $77.48   C. $73.19   D. $84.52

A bond with a $1,000 par value and a contract or coupon interest rate of 11%. A new issue would have a floatation cost of 6% of the $1,125 market value. The bonds mature in 7 years. The firm's average tax rate is 30%, and its marginal tax rate is 23%. What is the fırm's after-tax cost of the bond? 9.83% 8.55% 7.57% 6.58%

Assume that the average firm in C&J Corporation's industry is expected to grow at a constant rate of 4% and that its dividend yield is 8%. C&J is about as risky as the average firm in the industry and just paid a dividend (DO) of $2. Analysts expect that the growth rate of dividends will be 50% during the first year (g0,1 = 50%) and 20% during the second year (g1,2 = 20%). After Year 2, dividend growth will be constant at 4%. What is the required rate of return on C&J's stock? What is the estimated intrinsic price per share? Do not round intermediate calculations. Round the monetary value to the nearest cent and percentage value to the nearest

ACME, Inc. forecasts that it will have the free cash flows shown below. The free cash flows are expected to grow by 4% per year after year 3. Year 1 23 FCF (S million) 20 48 54 The weighted average cost of capital is 11%. The firm has $40 million of debt and 10 million shares outstanding. What is a good estimate of ACME's share price? O $55.25 $27.30 $60.70 $38.55