Operating Cash Flow Net Working Capital CAPEX Debt Shares Outstanding Last Year 74,230 -12,240 8,720 80,100 10,000 Next Year 78,076 -13,460 15,400 100,200 10,000 Assume that free cash flow is paid at the end of each year and we are at the beginning of next year. Las year's values are for the year end yesterday. Analysts expect Global Exports' cash flow to grow at 3% perpetuity. The WACC for Global is 11%. What is the fair price for Global Exports' shares today?

Operating Cash Flow Net Working Capital CAPEX Debt Shares Outstanding Last Year 74,230 -12,240 8,720 80,100 10,000 Next Year 78,076 -13,460 15,400 100,200 10,000 Assume that free cash flow is paid at the end of each year and we are at the beginning of next year. Las year's values are for the year end yesterday. Analysts expect Global Exports' cash flow to grow at 3% perpetuity. The WACC for Global is 11%. What is the fair price for Global Exports' shares today?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section: Chapter Questions

Problem 27P

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The forecast for Global Exports’ free cash flows for next year is provided in the table below. Selected Financial Information Global Exports Inc. ($000s) Last Year Next Year Operating Cash Flow 74,230 78,076 Net Working Capital -12,240 -13,460 CAPEX 8,720 15,400 Debt 80,100 100,200 Shares Outstanding 10,000 10,000 Assume that free cash flow is paid at the end of each year and we are at the beginning of next year. Last year’s values are for the year end yesterday. Analysts expect Global Exports’ cash flow to grow at 3% in perpetuity. The WACC for Global is 11%. What is the fair price for Global Exports’ shares today? Responses $62.37 $62.37 $69.85 $69.85 $73.27 $73.27 $71.86 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Leftway Information Systems is considering a contract with the Ibernian government to supply consulting services over a five-year period. The following real Ibernian pound cash flows are expected: Cash Flows in Year 2010 Ibernian Pounds 1 800 000 550 000 First cost | Net revenue 2014 to 2018 Further information is in the table below: Expected Ibernian inflation rate 10% Value of Ibernian pound in 2013 ($) 1.25 Expected annual rate of decline in the value of the İbernian pound 5% Expected inflation rate in Leftway's country 2.50% Leftway's real MARR 15% a. What is the real Ibernian pound internal rate of return on this project? (Hint: Leftway's country can be ignored in answering this question.) b. What is the current pound internal rate of return? (Hint: Leftway's country can be ignored in answering this question.) Use the internal rate of return in dollars to decide if Leftway should accept the proposed c. contract.
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HappyTunes Inc. forecasts the free cash flows (in millions) shown below. The weighted average cost of capital is 11.75%, the cost of equity is 19.25%, and the FCFs are expected to continue growing at a 5.25% rate after Year 5. Assuming that the ROIC is expected to remain constant in Year 5 and beyond, what is the Year O value of operations? Year: 1 2 3 4 5 Free cash flow: -$995 $15 $55 $80 $125 O-$310.32 million O $387.53 million O $139.31 million $445.46 million O-$176.72 milli
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Sisyphus Corp. has projected that their performance for the next five years results to the following: YEAR Revenue Cash Operating Expenses 1 50 30 2 55.00 33.00 3 60.50 36.30 4 66.55 39.93 5 73.21 43.92 Terminal value was assumed based on the growth rate of the cash flows. The annual Capital investment requirement is at P2 million. The income Tax rate is at 30%. The required rate of return for their business is 14%. Requirement: How much is the Free Cash Flow for years 1-5? How much is the Discounted Net Cash Flows to the Firm for years 1-5?
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