Year 1 2 3 4 Free cash flow $30 million $35 million $40 million $45 million General Industries is expected to generate the above free cash flows over the next four years, after which they are expected to grow at a rate of 3% per year. If the weighted average cost of capital is 13% and General has cash of $100 million, debt of $80 million, and 50 million shares outstanding, what is General's expected current share price? a. $7.62 b. $7.87 C. $8.27 d. $8.42
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- Free Cash Flow Valuation Dozier 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. Dozier’s weighted average cost of capital is WACC = 13%. What is Dozier’s horizon value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) What is the current value of operations for Dozier? Suppose Dozier has $10 million in marketable securities, $100 million in debt, and 10 million shares of stock. What is the intrinsic price per share?Dividend Payout The Wei Corporation expects next year’s net income to be $15 million. The firm is currently financed with 40% debt. Wei has $12 million of profitable investment opportunities, and it wishes to maintain its existing debt ratio. According to the residual distribution model (assuming all payments are in the form of dividends), how large should Wei’s dividend payout ratio be next year?Year Free cash flow to the firm Conundrum Mining is expected to generate the above free cash flows over the next four years, after which they are expected to grow at a rate of 3% per year. If the weighted average cost of capital is 15% and Conundrum has cash of $85 million, debt of $65 million, and 30 million shares outstanding, what is Conundrum's expected current share price? a. $6.16 b. $6.99 1 2 3 4 $15 million $20 million $25 million $30 million c. $6.53 d. $7.63
- Normaltown Corporation An analyst has predicted the free cash flows for Normaltown Corporation for the next four years: YEAR 2004 FCF $13 million 2005 $17 million 2006 $23 million 2007 $28 million After 2007, the free cash flows are expected to grow at an annual rate of 4%. The weighted average cost of capital for Normaltown is 14%. If the market value of the firm's debt is $110 million, find the value of the firm's equity. $158.77 million $89.39 million $216.00 million $119.00 millionIntro Nickelon's free cash flow during the current year is $150 million, which is expected to grow at a constant rate of 5% in the future. The weighted average cost of capital is 11%. Part 1 What is the firm's total corporate value (in $ million)? 0+ decimals SubmitConundrum Mining is expected to generate the following free cash flows over the next four years, after which they are expected to grow at a rate of 5% per year. If the weighted average cost of capital is 12% and Conundrum has cash of $80 million, debt of $60 million, and 30 million shares outstanding, what is Conundrum's expected current share price? Round to the nearest cent. Year 1 2 3 4 Free Cash Flow $12 million $18 million $22 million $26 million O A. $13.72 B. $16.25 C. $16.16 D. $10.84 E. $17.15
- 11. More on the corporate valuation model Praxis Corp. is expected to generate a free cash flow (FCF) of $11,375.00 million this year (FCF₁ = $11,375.00 million), and the FCF is expected to grow at a rate of 25.00% over the following two years (FCF2 and FCF3). After the third year, however, the FCF is expected to grow at a constant rate of 3.90% 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 11.70%, what is the current total firm value of Praxis Corp.? (Note: Round all intermediate calculations to two decimal places.) $271,083.87 million $204,208.90 million $245,050.68 million $34,332.59 million Praxis Corp.'s debt has a market value of $153,157 million, and Praxis Corp. has no preferred stock. If Praxis Corp. has 225 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…9 Kale Inc. forecasts the free cash flows to the firm (in millions) shown below. If the weighted average cost of capital is 11.0%, cost of equity is 16%, and FCF to the Firm is expected to grow at a rate of 5.0% after Year 2, what is the firm’s total corporate value, in millions?. Year 1 2 Free cash flow -P30 P130 Group of answer choices P1,686 P1,770 P1,925 P1837 P993 P1,456 P1,529 P1,606Company Z earnings and dividends per share will grow indefinitely by 4.9% a year if next year's dividend is $8.3. The market capitalization rate is 14.0%. If Company Z were to distribute all its earnings, it could maintain a level dividend stream of $10.1 a share. How much is the market actually paying per share for growth opportunities? A. -13.2 B. 39.5 C. 19.1 D. 3.3
- 11. More on the corporate valuation model Ankh-Sto Associates Co. is expected to generate a free cash flow (FCF) of $7,890.00 million this year (FCF, = $7,890.00 million), and the FCF is expected to grow at a rate of 19.00% over the following two years (FCF, and FCF). After the third year, however, the FCF is expected to grow at a constant rate of 2.10% per year, which will last forever (FCF). Assume the firm has no nonoperating assets. If Ankh-Sto Associates Co.'s weighted average cost of capital (WACC) is 6.30%, what is the current total firm value of Ankh-Sto Associates Co.? (Note: Round all intermediate calculations to two decimal places.) O $301,389.46 million $25,033.45 million $296,644.40 million O $251,157.88 million Ankh-Sto Associates Co.'s debt has a market value of $188,368 million, and Ankh-Sto Associates Co. has no preferred stock. If Ankh-Sto Associates Co. has 225 million shares of common stock outstanding, what is Ankh-Sto Associates Co.'s estimated intrinsic value per…55 Ron Enterprises forecasts the free cash flows (in millions) shown below. The weighted average cost of capital is 13.0%, and the FCFs are expected to continue growing at a 5.0% rate after Year 3. What is the firm’s total corporate value, in millions? Year 1 2 3 FCF -P15.0 P10.0 P40.0 Group of answer choices P348.48 P331.06 P386.13 P366.82 P314.51ACME, Inc. forecasts that it will have the free cash flows shown below. The free cash flows are expected to grow by 4% per year after year 3. Year 1 23 FCF (S million) 20 48 54 The weighted average cost of capital is 11%. The firm has $40 million of debt and 10 million shares outstanding. What is a good estimate of ACME's share price? O $55.25 $27.30 $60.70 $38.55