The following table shows projected free cash flows for the next four years for Quick Sky Corp, a company producing wind turbines. Free Cash Flow Year (Millions of dollars) 1 9.55 2 10.22 10.94 11.71 After the four year period, Quick Sky is expected to grow at a constant rate of 7% and its WACC is 15%. Quick Sky has $20 million of debt and $135 million shares of stock outstanding.
Q: Wendy and Wayne are evaluating a project that requires an initial investment of $795,000 in fixed…
A: Net present Value is the value of all cash flows throughout the life of project discounted to…
Q: A new electronic process monitor costs $990,000. This cost could be depreciated at 30% per year…
A: Cost of monitor = 990,000depreciation rate = 30%savings in operating cost before taxes =…
Q: Current Attempt in Progress Cullumber, Inc., a resort management company, is refurbishing one of its…
A: The IRR is the investment discount rate that corresponds to the difference between the original…
Q: Anne Company trying to decide which project should be taken out of three possible investments. The…
A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…
Q: Joshua borrowed $1,400 for one year and paid $70 in interest. The bank charged him a service charge…
A: Principal Amount = p = $1400Interest = i = $70Service Charges = sc = $12Number of Payment = n = 12
Q: Better Mousetraps has developed a new trap. It can go into production for an initial investment in…
A:
Q: You have the opportunity to purchase a security that will pay you $100,000 when it matures in three…
A: Solution:Rate of return refers to the return earned by the investor on per annum basis.So, rate of…
Q: value debt, but it has no preferred stock or any other outstanding claims. There are 20 million…
A: The constant growth model is a stock valuation method used in finance to determine a stock's…
Q: Consider the table of projected NOI cash flows for a commercial real estate asset below. Year 1 Year…
A: Here,NOI in Year 1 is $150,000NOI in Year 2 is $157,500NOI in Year 3 is $165,375NOI in Year 4 is…
Q: FINANCE; SHORT SALES. Hello, could you help me to answer these TWO questions and justify your…
A: Short selling refers to the transaction in which the individual borrows an asset and sells on the…
Q: Laurel's Lawn Care Limited has a new mower line that can generate revenues of $120,000 per year.…
A: Revenue = $120,000Direct production costs = $40,000Fixed costs = $15,000Tax rate = 25%Factory cost =…
Q: FastChips Semiconductors has inventory days of 75, accounts receivable days of 50, and accounts…
A: Cash conversion cycle is the period required to receive cash money from the customer after purchase…
Q: 1. An analyst offers three investment alternatives with the initial investment of A= $200,000; B=…
A: Here, YearAlternative AAlternative BAlternative C0 $ -2,00,000.00 $ -3,00,000.00 $ -1,00,000.001 $…
Q: If Carissa Dalton has a $130,000 home insured for $100,000, based on the 80 percent coinsurance…
A: Total Value of Home = $130,000Insured Amount = $10000080% co-insurance provision = 80% of Total…
Q: Consider a three-year project with the following information: initial fixed asset investment =…
A: Operating cash flows is the cash flows from normal operations -selling and producing of output of…
Q: epsilon At start (120,000) Year 1 40,000 Year 2 50,000 Year 3 60,000 Residual value of project at…
A: Payback period refers to the method of capital budgeting used for estimating the period consumed for…
Q: On January 1, 2023, Ayayai Limited pays $110,522 to purchase $125,000 of Chan Corporation 7% bonds.…
A: Here,CouponRate is 7%Interest Rate (r) is 10%Time Period (n) between 2023 to 2028 is 5 yearsFace…
Q: Suppose that you are attempting to value an income-producing property using the direct…
A: Direct capitalization is a valuation metric that uses the project's income as an indicative of the…
Q: 5. How many USD will you receive?
A: The relative worth of two currencies, or the amount of one currency that may be exchanged for one…
Q: Analysts project the FIN340 Company’s upcoming 5 years of (undiscounted) cash flow is as follows:…
A: Fair Market Value refers to the market value of the shares as per the prevailing market conditions…
Q: A municipal bond has a YTM of 4.11 percent while the YTM of a comparable taxable bond is 6.16…
A: The municipal bonds are tax-free bonds. The tax equivalent yield can be calculated using the…
Q: Barton Industries estimates its cost of common. equity by using three approaches: the CAPM, the band…
A: The equity cost can be referred to as the cost expressed in percentage terms which depicts the cost…
Q: Revenues Costs of Goods Sold Gross Profit Selling, General and Admin Depreciation EBIT Income tax…
A: NPV is defined as the sum of the present values of all future cash inflows less the sum of the…
Q: An investor buys 200 shares of stock selling at $52 per share using a margin of 64%. The stock pays…
A: Number of shares = 200 sharesSelling price per share = $52Annual dividend = $1Annual interest cost =…
Q: Microhard has issued a bond with the following characteristics: Par: $1,000 Time to maturity: 18…
A: Bond price will be the aggregate of present value of all coupon payments and present value of face…
Q: Suppose Capital One is advertising a 60-month, 5.59 % APR motorcycle loan. If you need to borrow…
A: Equal monthly installments:"Equal monthly installments" refers to a payment plan where the total…
Q: Assume that a $1,000,000 par value, semiannual coupon U.S. Treasury note with four years to maturity…
A: A treasury note is a kind of debt security issued by the government and private companies to the…
Q: United Pigpen is considering a proposal to manufacture high-protein hog feed. The project would…
A: Cost = 1,560,000 Depreciation for each of the 10 years would be $156,000 ($1560000 / 10) using the…
Q: Noelyn invested her ₱2,000 at 6% compounded quarterly. How much will be the amount at the end of 5…
A: Principal amount (P) = 2,0006% compounded quarterly rate = 6%/4 = 0.015t= 5, n= 4, r= 0.06Amount =…
Q: You observe a stock price of $18.75 shares of Gabagool Catering. You expect the company to have a…
A: The stock of a company pays periodic dividends. As per the dividend discount model the stock price…
Q: Karen White, a lottery winner, will receive the following payments over the next seven years. She…
A: The concept of time value of money will be used here. As per the concept of time value of money the…
Q: Suppose your firm is considering investing in a project with the cash flows shown below, that the…
A: Here, YearCash Flows0-28000015680027500031230004113000572200Required Return11%
Q: You have some extra cash this month and you are considering putting it toward your car loan. Your…
A: Loan amount refers to the amount borrowed by the borrower from the lender at a specified rate of…
Q: What is the current value (in millions) of Standard's equity?
A: The amount of cash available to a corporation after covering the costs of doing business is measured…
Q: Today, you purchased $5300 on a credit card that charges an APR rate of 22.9 percent, compounded…
A: Monthly payment refers to an amount to be paid every month for the repayment of a loan amount by the…
Q: Pharoah Incorporated management is considering investing in two alternative production systems. The…
A: Payback period (PBP) refers to the period or duration within which the company is able to recover…
Q: Each of the four independent situations below describes a finance lease in which annual lease…
A: Lease payments are regular, periodic payments made by a lessee to a lessor in exchange for the use…
Q: what is the OCF for each year of this project? (
A: The operating cash flow shows how well a company can produce cash through ongoing operations. It…
Q: A stock has an expected return of 4.5% for thee the first year, 6.9% for the second year, and 8% for…
A: The variance of the data set refers to its spread from the average. It tells how much the data…
Q: gan has decided to invest $500 quarterly for 5 years in an ordinary annuity at 12%. As her…
A: Future value of the amount is the amount of deposit made and amount of compounded interest…
Q: Determine the intrinsic value of an equity share,
A: The constant growth model is a stock valuation method used in finance to determine a stock's…
Q: The Closed Fund is a closed-end investment company with a portfolio currently worth $170 million. It…
A: NAV (Net Asset Value) is a key financial metric used to determine the per-share value of an…
Q: Beth purchased a $50,000 nonparticipating whole life insurance policy. The annual premium was…
A: An individual or corporation (the insured) and an insurance firm (the insurer) enter into a contract…
Q: Crane Corp will pay dividends of $5.00, $6.25, $4.75, and $3.00 in the next four years. Thereafter,…
A: Current price of stock is the price which can be paid for purchase of the stock. It is also called…
Q: What is the project's IRR? Round your answer to two decimal places. ______ %
A: IRR (Internal Rate of Return)IRR is the discount rate at which the net present value (NPV) of cash…
Q: You have decided to refinance your mortgage. You plan to borrow whatever is outstanding on your…
A: Present value is the value of loan or future periodic payments at the present date.
Q: Builtrite stock is currently selling for $40 and recently paid a dividend of $1.50. The stock has a…
A: Here,CurrentDividend (D0) is $1.50Curremt Market Price (P0) is $40Growth Rate (g) is 12%
Q: Find the original price for a kitchen table and chairs selling for $799.99 at 40% off. Round to the…
A: The formula used to find the original price after a discount is applied is:Where:Original Price:…
Q: a. What is the net cash flow at time 0 if the old equipment is replaced? Note: Negative amounts…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: Mary Smith is interested in buying the stock of Blossom, Inc., which is increasing its dividends at…
A: Solution:Dividend Discount Model (DDM) is the equity model which calculates the current value of…
pm.8
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
- Dantzler Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFS) during the next 3 years, after which FCF is expected to grow at a constant 6% rate. Dantzler's WACC is 10%. Year $ 0 1 $ 2 FCF (S millions) - $22 a. What is Dantzler's horizon, or continuing, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round intermediate calculations. Round your answer to two decimal places. million 3 $30 $52 b. What is the firm's market value today? Assume that Dantzler has zero nonoperating assets. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round intermediate calculations. Round your answer to two decimal places. million c. Suppose Dantzler has $188.80 million of debt and 23 million shares of stock outstanding. What is your estimate of…Dozier Corporation is a fast-growing supplier of office products. Analyst project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 7 percent rate. WACC= 13 percent. Year : 0 1 2 3 FCF(RM Millions): NA - RM 20 RM 30 RM 40 (i) What is Dozier’s terminal, or horizon, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3) (ii) What is the firm’s value today? (iii) Suppose Dozier has RM 100 million of debt and 10 million shares of stock outstanding. What is your estimate of the price per share?Consider the case of Flying Cow Aviation Inc.: Flying Cow Aviation Inc. is expected to generate a free cash flow (FCF) of $1,180,000 this year, and the FCF is expected to grow at a rate of 14% over the following two years (FCF22 and FCF33). After the third year, however, the company’s FCFs are expected to grow at a constant rate of 6% per year, which will last forever (FCF4 - ∞4 - ∞). If Flying Cow’s weighted average cost of capital (WACC) is 12%, complete the following table and compute the current value of Flying Cow’s operations. Round all dollar amounts to the nearest whole dollar, and assume that the firm does not have any nonoperating assets in its balance sheet and that all FCFs occur at the end of each year. Year CFtt PV(FCFtt) FCF11 $1,180,000 FCF22 FCF33 FCF44 Horizon Value4- ∞4- ∞ Vopop = Flying Cow’s debt has a market value of $16,875,959, and Flying Cow has no preferred stock in its…
- Fauji Fertilizer Corporation expects to generate following free cashflows in coming 5 years. Year 1 2 3 4 5 FCF (Rs. Million) 51 70 77 72 80 After this time period, the free cashflows will grow constantly at 3% per year. The firm’s cost of capital is 13%. Using the discounted free cashflow model, calculate the following. What is the enterprise value of Fauji Fertilizer Ltd? If Fauji Fertilizer have access cash of Rs. 32 million, debt of Rs. 280 million, and the 40 million shares outstanding and trading in the market, what should be the expected share price of Fauji Fertilizer? c. Suppose that the stocks of Fauji Fertilizer are being sold in the market at Rs. 12 per share. Will you buy that stock? why or why not?Fauji Fertilizer Corporation expects to generate following free cashflows in coming 5 years. Year 1 2 3 4 5 FCF (Rs. Million) 51 70 77 72 80 After this time period, the free cashflows will grow constantly at 3% per year. The firm’s cost of capital is 13%. Using the discounted free cashflow model, calculate the following. What is the enterprise value of Fauji Fertilizer Ltd? If Fauji Fertilizer have access cash of Rs. 32 million, debt of Rs. 280 million, and the 40 million shares outstanding and trading in the market, what should be the expected share price of Fauji Fertilizer? Suppose that the stocks of Fauji Fertilizer are being sold in the market at Rs. 12 per share. Will you buy that stock? why or why not?UBTECH Robotics is expected to generate the following free cash flows over the next fiveyears. After which, the free cash flows are expected to grow at the industry average of 3% peryear. Using the discounted free cash flow model and the weighted average cost of capital of11%UBTECH Robotics FCF Forecast ($ Millions)Year 1999 2000 2001 2002 2003 2004FCF (Amount in Millions)$55 $45 $89 $102 $84 $87a. Estimate the enterprise value (V0) of UBTECH Robotics.b. If UBTECH Robotics has excess cash of $5.6 Billion, a debt of $800 Million and 50 Millionshares outstanding, estimate its share price (P0).
- Dantzler Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFS) during the next 3 years, after which FCF is expected to grow at a constant 7% rate. Dantzler's WACC is 13%. Year ° 1 2 3 FCF (5 millions) $9 $26 $53 a. What is Dantzler's horizon, or continuing, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round Intermediate calculations. Round your answer to two decimal places. $ million b. What is the firm's market value today? Assume that Dantzler has zero nonoperating assets. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round intermediate calculations. Round your answer to two decimal places. $ million c. Suppose Dantzler has $126.80 million of debt and 6 million shares of stock outstanding. What is your estimate of the…Dantzler Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 4% rate. Dantzler's WACC is 12%. Year 0 1 2 3 FCF ($ millions) $-11 $15 $56 What is Dantzler's horizon, or continuing, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round intermediate calculations. Round your answer to two decimal places.$ million What is the firm's market value today? Assume that Dantzler has zero nonoperating assets. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round intermediate calculations. Round your answer to two decimal places.$ million Suppose Dantzler has $95.80 million of debt and 36 million shares of…Lannie Industries is planning its operations for next year. Lannie Bells, the CEO, wants you to forecast the firm's additional funds needed (AFN). Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Pesos are in millions. Last year’s sale P350 Last year’s accounts payable P40 Sales growth rate 30% Last year’s notes payable P50 Last year’s total assets P500 Last year’s accruals P30 Last year’s profit margin 5% Target payout ratio 40% A. P106.2M B. P123.9M C. P115.4M D. P119.9M E. P100.4M
- Lannie Industries is planning its operations for next year. Lannie Bells, the CEO, wants you to forecast the firm's additional funds needed (AFN). Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Pesos are in millions. Last year’s sale P350 Last year’s accounts payable P40 Sales growth rate 30% Last year’s notes payable P50 Last year’s total assets P500 Last year’s accruals P30 Last year’s profit margin 5% Target payout ratio 40%Consider the case of Morose Otter Hydraulic Manufacturers Inc.: Morose Otter Hydraulic Manufacturers Inc. is expected to generate a free cash flow (FCF) of $210,000 this year, and the FCF is expected to grow at a rate of 18% over the following two years (FCF22 and FCF33). After the third year, however, the company’s FCFs are expected to grow at a constant rate of 8% per year, which will last forever (FCF4 - ∞4 - ∞). If Morose Otter’s weighted average cost of capital (WACC) is 16%, complete the following table and compute the current value of Morose Otter’s operations. Round all dollar amounts to the nearest whole dollar, and assume that the firm does not have any nonoperating assets in its balance sheet and that all FCFs occur at the end of each year. Year CFtt PV(FCFtt) FCF11 $210,000 $181,034 FCF22 $247,800 $184,156 FCF33 $292,404 $187,331 FCF44 $315,796 Horizon Value4- ∞4- ∞ $3,157,960 $2,180,141 Vopop = $3,081,485…Dantzler Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFS) during the next 3 years, after which FCF is expected to grow at a constant 5% rate. Dantzler's WACC is 16%. HIH Year 1 2 3 FCF (S millions) - $15 $33 $59 a. What is Dantzler's horizon, or continuing, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round intermediate calculations. Round your answer to two decimal places. million b. What is the firm's market value today? Assume that Dantzler has zero nonoperating assets. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round intermediate calculations. Round your answer to two decimal places. million c. Suppose Dantzler has $129.60 million of debt and 23 million shares of stock outstanding. What is your estimate of…