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![Assume that today is December 31, 2021, and
that the following information applies to
Abner Airlines:
•After-tax operating income [EBIT (1-T)] for
2022 is expected to be $650 million.
•The depreciation experse for 2022 is expected
to be $100 million
0
The capital expenditures for 2022 are expected
to be $375 million.
•No change is expected in net operating working capital
•The free cash flow is expected to grow at a constant
rate of 3% per year
отне
required return an equity is 14%
"The WACC is 12%
•The firm has $190 million of conoperating assets
-The market value of the company's debt is $2,454 billion
'350 million shares of stock are outstanding
* Using the corporate valuation model approach, what
should be the company's stock price today? Raund
answer to the nearest cent.
your
$
f
R
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- Assume that today is December 31, 2021, and that the following information applies to Abner Airlines: After-tax operating income [EBIT(1 - T)] for 2022 is expected to be $550 million. • The depreciation expense for 2022 is expected to be $200 million. The capital expenditures for 2022 are expected to be $250 million. • No change is expected in net operating working capital. • The free cash flow is expected to grow at a constant rate of 6% per year. • The required return on equity is 15%. • The WACC is 9%. • The firm has $210 million of nonoperating assets. • The market value of the company's debt is $3.727 billion. • 260 million shares of stock are outstanding. Using the corporate valuation model approach, what should be the company's stock price today? Do not round intermediate calculations. Round your answer to the nearest cent.Assume that today is December 31, 2018, and that the following information applies to Abner Airlines: After-tax operating income [EBIT(1 - T)] for 2019 is expected to be $650 million. The depreciation expense for 2019 is expected to be $200 million. The capital expenditures for 2019 are expected to be $325 million. No change is expected in net operating working capital. The free cash flow is expected to grow at a constant rate of 4% per year. The required return on equity is 16%. The WACC is 10%. The firm has $200 million of non-operating assets. The market value of the company's debt is $3.940 billion. 80 million shares of stock are outstanding. Using the corporate valuation model approach, what should be the company's stock price today? Do not round intermediate calculations. Round your answer to the nearest cent.ssume that today is December 31, 2018, and that the following information applies to Abner Airlines: After-tax operating income [EBIT(1 - T)] for 2019 is expected to be $500 million. The depreciation expense for 2019 is expected to be $180 million. The capital expenditures for 2019 are expected to be $400 million. No change is expected in net operating working capital. The free cash flow is expected to grow at a constant rate of 6% per year. The required return on equity is 15%. The WACC is 10%. The firm has $200 million of non-operating assets. The market value of the company's debt is $3.096 billion. 340 million shares of stock are outstanding. Using the corporate valuation model approach, what should be the company's stock price today? Do not round intermediate calculations. Round your answer to the nearest cent. $
- Assume that today is December 31, 2019, and that the following information applies to Abner Airlines: After-tax operating income [EBIT(1 - T)] for 2020 is expected to be $550 million. The depreciation expense for 2020 is expected to be $70 million. The capital expenditures for 2020 are expected to be $325 million. No change is expected in net operating working capital. The free cash flow is expected to grow at a constant rate of 6% per year. The required return on equity is 14%. The WACC is 11%. The firm has $206 million of non-operating assets. The market value of the company's debt is $4.799 billion. 70 million shares of stock are outstanding. Using the corporate valuation model approach, what should be the company's stock price today? Do not round intermediate calculations. Round your answer to the nearest cent. $ Answer is NOT 204.4 or 204.39The following is a four-year forecast for Torino Marine. Year Free cash flow ($ millions) a. Fair market value b. Fair market value per share 2022 -61 $ a. Estimate the fair market value of Torino Marine at the end of 2021. Assume that after 2025, earnings before interest and tax will remain constant at $200 million, depreciation will equal capital expenditures in each year, and working capital will not change. Torino Marine's weighted-average cost of capital is 15 percent and its tax rate is 30 percent. Note: Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place. 6.89 2023 82 b. Estimate the fair market value per share of Torino Marine's equity at the end of 2021 if the company has 46 million shares outstanding and the market value of its interest-bearing liabilities on the valuation date equals $360 million. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. 2024 99 million 2025 121Assume today is December 31, 2019. Barrington Industries expects that its 2020 after-tax operating income [EBIT(1 – T)] will be $420 million and its 2020 depreciation expense will be $70 million. Barrington's 2020 gross capital expenditures are expected to be $100 million and the change in its net operating working capital for 2020 will be $30 million. The firm's free cash flow is expected to grow at a constant rate of 5% annually. Assume that its free cash flow occurs at the end of each year. The firm's weighted average cost of capital is 8.8%; the market value of the company's debt is $2.15 billion; and the company has 190 million shares of common stock outstanding. The firm has no preferred stock on its balance sheet and has no plans to use it for future capital budgeting projects. Also, the firm has zero non-operating assets. Using the corporate valuation model, what should be the company's stock price today (December 31, 2019)? Do not round intermediate calculations. Round your…
- The following is a four-year forecast for Torino Marine. Year 2022 2023 2024 2025 Free cash flow ($ millions) −59 80 97 119 Estimate the fair market value of Torino Marine at the end of 2021. Assume that after 2025, earnings before interest and tax will remain constant at $200 million, depreciation will equal capital expenditures in each year, and working capital will not change. Torino Marine’s weighted-average cost of capital is 12 percent and its tax rate is 40 percent. Note: Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place. Estimate the fair market value per share of Torino Marine’s equity at the end of 2021 if the company has 44 million shares outstanding and the market value of its interest-bearing liabilities on the valuation date equals $340 million. Note: Do not round intermediate calculations. Round your answer to 2 decimal places.The following is a four-year forecast for Torino Marine. Year 2022 2023 2024 2025 Free cash flow ($ millions) −60 81 98 120 Estimate the fair market value of Torino Marine at the end of 2021. Assume that after 2025, earnings before interest and tax will remain constant at $200 million, depreciation will equal capital expenditures in each year, and working capital will not change. Torino Marine’s weighted-average cost of capital is 13 percent and its tax rate is 20 percent. Note: Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place. Estimate the fair market value per share of Torino Marine’s equity at the end of 2021 if the company has 45 million shares outstanding and the market value of its interest-bearing liabilities on the valuation date equals $350 million. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. I have the second question right…The following table tracks the main components of working capital over the life of a four-year project. Accounts receivable Inventory Accounts payable Net working capital Cash flows 2019 2019 0 95,000 35,000 2021 2020 2022 190,000 265,000 230,000 150,000 150,000 115,000 60,000 70,000 45,000 Calculate net working capital and the cash inflows and outflows due to investment in working capital. (Negative answers should be indicated by a minus sign.) 2020 2021 2023 0 0 0 2022 2023
- ABC Enterprise would like to evaluate/analyze a potential investment.. Given the following:Investment amount - 450,000 (2022)Dividends / Revenue stream - 100,000 for the first year and an interval of 5,000 for the succeeding years Discount rate - 14%a. NPV for the perio 2023 through 2029;b. Total NPV using manual computation;c. Total NPV using the Excel function; andd. IRR rate.The following table tracks the main components of working capital over the life of a four-year project. 2024 2025 0 194,000 0 97,000 36,000 0 Accounts receivable Inventory Accounts payable Net working capital Cash flows 2021 2021 0 77,000 26,000 2022 154,000 132,000 51,000 Calculate net working capital and the cash inflows and outflows due to investment in working capital. Note: Negative answers should be indicated by a minus sign. 2023 229,000 132,000 52,000 2022 2023 2024 2025Quantitative Problem 1: Assume today is December 31, 2019. Barrington Industries expects that its 2020 after-tax operating income [EBIT(1 – T)] will be $450 million and its 2020 depreciation expense will be $70 million. Barrington's 2020 gross capital expenditures are expected to be $100 million and the change in its net operating working capital for 2020 will be $25 million. The firm's free cash flow is expected to grow at a constant rate of 5% annually. Assume that its free cash flow occurs at the end of each year. The firm's weighted average cost of capital is 9%; the market value of the company's debt is $2.15 billion; and the company has 180 million shares of common stock outstanding. The firm has no preferred stock on its balance sheet and has no plans to use it for future capital budgeting projects. Also, the firm has zero non-operating assets. Using the corporate valuation model, what should be the company's stock price today (December 31, 2019)? Do not round intermediate…
