Acme Inc. is expected to generate a free cash flow (FCF) of $5,840.00 million this year (FCF, = $5,840.00 million), and the FCF is expected to grow at a rate of 25.00% over the following two years (FCF, and FCF,). After the third year, however, the FCF is expected to grow at a constant rate of 3.90% per year, which will last forever (FCF). Assume the firm has no nonoperating assets. If Acme Inc.'s weighted average cost of capital (WACC) is 11.70%, what is the current total firm value of Acme Inc.? (Note: Round all intermediate calculations to two decimal places.) $104,842.25 million $17,626.58 million $139,176.32 million $125,810.70 million Acme Inc.'s debt has a market value of $78,632 million, and Acme Inc. has no preferred stock. If Acme Inc. has 375 million shares of common stock outstanding, what is Acme Inc.'s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.) $209.68 $68.89 $76.88 $69.89

Acme Inc. is expected to generate a free cash flow (FCF) of $5,840.00 million this year (FCF, = $5,840.00 million), and the FCF is expected to grow at a rate of 25.00% over the following two years (FCF, and FCF,). After the third year, however, the FCF is expected to grow at a constant rate of 3.90% per year, which will last forever (FCF). Assume the firm has no nonoperating assets. If Acme Inc.'s weighted average cost of capital (WACC) is 11.70%, what is the current total firm value of Acme Inc.? (Note: Round all intermediate calculations to two decimal places.) $104,842.25 million $17,626.58 million $139,176.32 million $125,810.70 million Acme Inc.'s debt has a market value of $78,632 million, and Acme Inc. has no preferred stock. If Acme Inc. has 375 million shares of common stock outstanding, what is Acme Inc.'s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.) $209.68 $68.89 $76.88 $69.89

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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More on the corporate valuation model Globex Corp. is expected to generate a free cash flow (FCF) of $2,020.00 million this year (FCF₁ = $2,020.00 million), and the FCF is expected to grow at a rate of 20.20% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 2.46% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Globex Corp.’s weighted average cost of capital (WACC) is 7.38%, what is the current total firm value of Globex Corp.? (Note: Round all intermediate calculations to two decimal places.) $6,344.09 million $67,122.55 million $66,519.07 million $55,432.56 million Globex Corp.’s debt has a market value of $41,574 million, and Globex Corp. has no preferred stock. If Globex Corp. has 300 million shares of common stock outstanding, what is Globex Corp.’s estimated intrinsic value per share of common stock? (Note: Round all…
11. More on the corporate valuation model Ankh-Sto Associates Co. is expected to generate a free cash flow (FCF) of $7,890.00 million this year (FCF, = $7,890.00 million), and the FCF is expected to grow at a rate of 19.00% over the following two years (FCF, and FCF). After the third year, however, the FCF is expected to grow at a constant rate of 2.10% per year, which will last forever (FCF). Assume the firm has no nonoperating assets. If Ankh-Sto Associates Co.'s weighted average cost of capital (WACC) is 6.30%, what is the current total firm value of Ankh-Sto Associates Co.? (Note: Round all intermediate calculations to two decimal places.) O $301,389.46 million $25,033.45 million $296,644.40 million O $251,157.88 million Ankh-Sto Associates Co.'s debt has a market value of $188,368 million, and Ankh-Sto Associates Co. has no preferred stock. If Ankh-Sto Associates Co. has 225 million shares of common stock outstanding, what is Ankh-Sto Associates Co.'s estimated intrinsic value per…
11. More on the corporate valuation model Omni Consumer Products Co. is expected to generate a free cash flow (FCF) of $9,050.00 million this year (FCF₁ = $9,050.00 million), and the FCF is expected to grow at a rate of 21.40% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 2.82% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Omni Consumer Products Co.’s weighted average cost of capital (WACC) is 8.46%, what is the current total firm value of Omni Consumer Products Co.? (Note: Round all intermediate calculations to two decimal places.) $28,137.56 million $262,460.16 million $271,293.23 million $218,716.80 million Omni Consumer Products Co.’s debt has a market value of $164,038 million, and Omni Consumer Products Co. has no preferred stock. If Omni Consumer Products Co. has 675 million shares of common stock outstanding, what is…
11. More on the corporate valuation model Praxis Corp. is expected to generate a free cash flow (FCF) of $2,285.00 million this year (FCF₁ = $2,285.00 million), and the FCF is expected to grow at a rate of 23.80% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 3.54% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Praxis Corp.’s weighted average cost of capital (WACC) is 10.62%, what is the current total firm value of Praxis Corp.? (Note: Round all intermediate calculations to two decimal places.) a. $58,180.09 million b. $6,964.55 million c. $53,760.19 million d. $44,800.16 million Praxis Corp.’s debt has a market value of $33,600 million, and Praxis Corp. has no preferred stock. If Praxis Corp. has 150 million shares of common stock outstanding, what is Praxis Corp.’s estimated intrinsic value per share of common stock?…
All parts are under 1 questions and per your policy you can answer all parts to 1 question. 11. More on the corporate valuation model Qwerty Logistics Corp. is expected to generate a free cash flow (FCF) of $9,420.00 million this year (FCF₁ = $9,420.00 million), and the FCF is expected to grow at a rate of 20.20% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 2.46% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. A. If Qwerty Logistics Corp.’s weighted average cost of capital (WACC) is 7.38%, what is the current total firm value of Qwerty Logistics Corp.? (Note: Round all intermediate calculations to two decimal places.) $310,202.70 million $29,584.83 million $313,016.94 million $258,502.25 million B. Qwerty Logistics Corp.’s debt has a market value of $193,877 million, and Qwerty Logistics Corp. has no preferred stock. If…
ory 5. More on the corporate valuation model Omni Consumer Products Co. is expected to generate a free cash flow (FCF) of $14.180.00 million this year (FCFS=$14,180.00 million), and the FOF is expected to grow at a rate of 26.20% over the following two years (FCF and FCFs). After the third year however, the FCF is expected to grow at a constant rate of 4.26% per year, which will last forever (FCF4). Assume the firm has no nonoperating assets. If Omni Consumer Products Co.'s weighted average cost of capital (WACC) is 12.78%, what is the current total firm value of Omni Consumer Products Co.? (Note: Round all intermediate calculations to tvo decimal places.) O$235.039.29 milion O$282,047.15 million O $42.385.81 million. O$318.744.50 million Omni Consumer Products Co.'s debt has a market value of $176.279 million, and Omni Consumer Products Co. has no preferred stock. If Omni Consumer Products Co. has 225 million shares of common stock outstanding, what is Omni Consumer Products Co.'s…
Universal Air forecasts growth of 8% for the next six years and 4% thereafter. Given last year's free cash flow was $10 million, what is its horizon value if the company's cost of capital is 12%? Following the textbook assumption, we have the horizon time defined as the year prior to settling down to the long run trend. Thus the horizon time is year 5. $198.36 million. $167.20 million $267.60 million $0
Value in Valuation, Inc. is assessing the value of two companies, Company A and Company B, which projects average net cashflows in the next five years of P4,000,000 and 3,000,000, respectively. The required rate of return is both 8%. Which of the following has the higher equity value and by how much? And assuming that Company A is being sold at P48,000,000 while Company B is being sold at P36,500,000, what should be Value in Valuation’s best recommendation among the following choices: 1. To buy Company A because the selling price is higher than its equity value 2. To buy Company A because it is being sold at a discount of P2,000,000 3. To buy Company B because the selling price is lower than its equity value 4. To buy Company B because it is being sold at a premium of P1,000,000
Company Z forecasts a positive Free Cash Flow for the coming year, with FCF1 = $20,000,000, and it expects a growth rate of 20% for the next two years. After Year 3, FCF is expected to grow at a constant rate of 5% forever. The Weighted Average Cost of Capital (WACC) is 9.00%, and the company has $150,000,000 of long-term debt (the remainder is comprised of common equity) and 10.0 million shares of common stock outstanding. What is the firm's estimated intrinsic value per share of common stock?
Company Z forecasts a positive Free Cash Flow for the coming year, with FCF1 = $20,000,000, and it expects a growth rate of 20% for the next two years. After Year 3, FCF is expected to grow at a constant rate of 5% forever. The Weighted Average Cost of Capital (WACC) is 9.00%, and the company has $150,000,000 of long-term debt (the remainder is comprised of common equity) and 10.0 million shares of common stock outstanding. What is the firm's estimated intrinsic value per share of common stock? Group of answer choices 64.46 49.46 67.88 54.40 61.82
Kosm Inc. forecasts a positive Free Cash Flow for the coming year, with FCF1 = $10,000,000, and it expects a growth rate of 30% for the next two years. After Year 3, FCF is expected to grow at a constant rate of 4% forever. The Weighted Average Cost of Capital (WACC) is 11%, and the company has $65,000,000 of long-term debt (the remainder is comprised of common equity) and 10.0 million shares of common stock outstanding. What is the firm's estimated intrinsic value per share of common stock?
STARS Inc. forecasts a positive Free Cash Flow for the coming year, with FCF1 = $10,000,000, and it expects a growth rate of 20% for the next two years. After Year 3, FCF is expected to grow at a constant rate of 6% forever. The Weighted Average Cost of Capital (WACC) is 10.00%, and the company has $85,000,000 of long-term debt (the remainder is comprised of common equity) and 12.0 million shares of common stock outstanding. What is the firm's estimated intrinsic value per share of common stock? (Ch. 9) Group of answer choices 27.75 21.22 19.29 24.12 26.38

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