ear 1 2 3 4 5 FCF -$22.27 $37.7 $43.3 $52.9 $55.5 The weighted average cost of capital is 12%, and the FCFS are expected to continue growing at a 3% rate after Year 5. The firm has $26 million of market-value debt, but it has no preferre tock or any other outstanding claims. There are 18 million shares outstanding. Also, the firm has zero non-operating assets. What is the value of the stock price today (Year 0)? Round you inswer to the nearest cent. Do not round intermediate calculations. = per share According to the valuation models developed in this chapter, the value that an investor assigns to a share of stock is dependent on the length of time the investor plans to hold the stock. the statement above is -Select- ✓

A firm is currently an all equity firm that has 395,000 shares of stock outstanding with a market price of $19.50 a share. The current cost of equity is 15.5% and the tax rate is 24%. The firm is considering adding $925,000 of debt with a coupon rate of 8% to it's capital structure.  The debt will be sold at par value. What is the leveled value of the equity?   A) 7,349,475 B) 8 716,950 C) 6,999,500 D) 7,528,275 E) 7,132,050

Use the following information for questions 17 and 18: Powell Plastics, Inc. (PP) currently has zero debt. Its free cash flow last year was $48,000, and it is a zero growth company. PP's current cost of equity is 10%, and its tax rate is 40%. The firm has 10,000 shares of common stock outstanding selling at a price per share of $48.00. PP is considering moving to a capital structure that is comprised of 30% debt and 70% equity. The debt would have an interest rate of 8%. The new funds would be used to repurchase stock. It is estimated that the increase in risk resulting from the added leverage would cause the required rate of return on equity to rise to 12%. If this plan were carried out, what would be PP's new value of operations? O $487,805 $505,524 O $525,173 O $734,634 O $813,008

Albrecht Inc. is a no-growth firm whose sales fiuctuate seasonally, causing total assets to vary from $320,000 to $410,000, but fixed assets remain constant at $260,000. If the firm follows a maturity matching (or moderate) working capital financing policy, what is the most likely total of long-term debt plus equity capital? a $274.360 b. $260,642 c. $304,000 d. $320,000 e. $288,800