Homework Help is Here – Start Your Trial Now!
Business
Finance
Praxis Corp. is expected to generate a free cash flow (FCF) of $12,975.00 million this year (FCF₁ = $12,975.00 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 Praxis Corp.’s weighted average cost of capital (WACC) is 8.46%, what is the current total firm value of Praxis Corp.? (Note: Round all intermediate calculations to two decimal places.)              a.     $376,289.47 million            b.   $388,953.45 million            c.     $313,574.56 million            d.     $40,340.86 million   Praxis Corp.’s debt has a market value of $235,181 million, and Praxis Corp. has no preferred stock. If Praxis Corp. has 450 million shares of common stock outstanding, what is Praxis Corp.’s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.)            a.       $173.21          b.       $522.62          c.      $174.21          d.       $191.63

Praxis Corp. is expected to generate a free cash flow (FCF) of $12,975.00 million this year (FCF₁ = $12,975.00 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 Praxis Corp.’s weighted average cost of capital (WACC) is 8.46%, what is the current total firm value of Praxis Corp.? (Note: Round all intermediate calculations to two decimal places.)              a.     $376,289.47 million            b.   $388,953.45 million            c.     $313,574.56 million            d.     $40,340.86 million   Praxis Corp.’s debt has a market value of $235,181 million, and Praxis Corp. has no preferred stock. If Praxis Corp. has 450 million shares of common stock outstanding, what is Praxis Corp.’s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.)            a.       $173.21          b.       $522.62          c.      $174.21          d.       $191.63

Essentials Of Investments
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
See similar textbooks
icon
Related questions
Question

Praxis Corp. is expected to generate a free cash flow (FCF) of $12,975.00 million this year (FCF₁ = $12,975.00 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 Praxis Corp.’s weighted average cost of capital (WACC) is 8.46%, what is the current total firm value of Praxis Corp.? (Note: Round all intermediate calculations to two decimal places.)

 

           a.     $376,289.47 million

           b.   $388,953.45 million

           c.     $313,574.56 million

           d.     $40,340.86 million

 

Praxis Corp.’s debt has a market value of $235,181 million, and Praxis Corp. has no preferred stock. If Praxis Corp. has 450 million shares of common stock outstanding, what is Praxis Corp.’s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.)

 

         a.       $173.21

         b.       $522.62

         c.      $174.21

         d.       $191.63

 

 

Praxis Corp. is expected to generate a free cash flow (FCF) of $12,975.00 million this year (FCF1 = $12,975.00 million), and the FCF is expected to grow at a rate of 21.40% over the following two years (FCF2 and FCF:). After the third year, however, the FCF is expected to grow at a constant rate of 2.82% per year, which will last forever (FCF-). Assume the firm has no nonoperating assets. If Praxis Corp.'s weighted average cost of capital (WACC) is 8.46%, what is the current total firm value of Praxis Corp.? (Note: Round all intermediate calculations to two decimal places.) O $376,289.47 million $388,953.45 million $313,574.56 million $40,340.86 million Praxis Corp.'s debt has a market value of $235,181 million, and Praxis Corp. has no preferred stock. If Praxis Corp. has 450 million shares of common stock outstanding, what is Praxis Corp.'s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.) $173.21 $522.62 O $174.21 O $191.63
Transcribed Image Text:Praxis Corp. is expected to generate a free cash flow (FCF) of $12,975.00 million this year (FCF1 = $12,975.00 million), and the FCF is expected to grow at a rate of 21.40% over the following two years (FCF2 and FCF:). After the third year, however, the FCF is expected to grow at a constant rate of 2.82% per year, which will last forever (FCF-). Assume the firm has no nonoperating assets. If Praxis Corp.'s weighted average cost of capital (WACC) is 8.46%, what is the current total firm value of Praxis Corp.? (Note: Round all intermediate calculations to two decimal places.) O $376,289.47 million $388,953.45 million $313,574.56 million $40,340.86 million Praxis Corp.'s debt has a market value of $235,181 million, and Praxis Corp. has no preferred stock. If Praxis Corp. has 450 million shares of common stock outstanding, what is Praxis Corp.'s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.) $173.21 $522.62 O $174.21 O $191.63
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 4 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Capital Budgeting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS