Question
In: Finance
You have been tasked with using the FCF model to value Julie’s Jewelry Co. After your...
You have been tasked with using the FCF model to value Julie’s Jewelry Co. After your initial review, you find that Julie’s has a reported equity beta of 1.7, a debt-to-equity ratio of .5, and a tax rate of 21 percent. In addition, market conditions suggest a risk-free rate of 6 percent and a market risk premium of 9 percent. If Julie’s had FCF last year of $52.0 million and has current debt outstanding of $129 million, find the value of Julie’s equity assuming a 5.2 percent growth rate in FCF. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.
Solutions
Expert Solution
Assuming the debt is risk free for Julie's ie Cost of debt = 6% (since no cost of debt is provided in the Q)
Value of Equity = $ 388.05 M
Formulae
jeff jeffy answered 2 years agoRelated Solutions
You have been tasked with using the FCF model to value Julie’s Jewelry Co. After your...
You have been tasked with using the FCF model to value Julie’s
Jewelry Co. After your initial review, you find that Julie’s has a
reported equity beta of 1.4, a debt-to-equity ratio of .5, and a
tax rate of 21 percent. In addition, market conditions suggest a
risk-free rate of 2 percent and a market risk premium of 10
percent. If Julie’s had FCF last year of $43.5 million and has
current debt outstanding of $112 million, find the value...
You have been tasked with using the FCF model to value Julie’s Jewelry Co. After your...
You have been tasked with using the FCF model to value Julie’s
Jewelry Co. After your initial review, you find that Julie’s has a
reported equity beta of 1.7, a debt-to-equity ratio of .5, and a
tax rate of 21 percent. In addition, market conditions suggest a
risk-free rate of 6 percent and a market risk premium of 11
percent. If Julie’s had FCF last year of $50.0 million and has
current debt outstanding of $125 million, find the value...
You are going to value Lauryn’s Doll Co. using the FCF model. After consulting various sources,...
You are going to value Lauryn’s Doll Co. using the FCF model.
After consulting various sources, you find that Lauryn's has a
reported equity beta of 1.4, a debt-to-equity ratio of .4, and a
tax rate of 21 percent. Assume a risk-free rate of 4 percent and a
market risk premium of 8 percent. Lauryn’s Doll Co. had EBIT last
year of $41 million, which is net of a depreciation expense of $4.1
million. In addition, Lauryn's made $4 million...
You are going to value Lauryn’s Doll Co. using the FCF model. After consulting various sources,...
You are going to value Lauryn’s Doll Co. using the FCF model.
After consulting various sources, you find that Lauryn's has a
reported equity beta of 1.6, a debt-to-equity ratio of .6, and a
tax rate of 21 percent. Assume a risk-free rate of 6 percent and a
market risk premium of 8 percent. Lauryn’s Doll Co. had EBIT last
year of $53 million, which is net of a depreciation expense of $5.3
million. In addition, Lauryn's made $4.75 million...
You are going to value Lauryn’s Doll Co. using the FCF model. After consulting various sources,...
You are going to value Lauryn’s Doll Co. using the FCF model.
After consulting various sources, you find that Lauryn's has a
reported equity beta of 1.4, a debt-to-equity ratio of .5, and a
tax rate of 21 percent. Based on this information, what is the
asset beta for Lauryn’s? (Do not round intermediate
calculations. Round your answer to 2 decimal places.)
Lauryn’s asset beta
You are going to value Lauryn’s Doll Co. using the FCF model. After consulting various sources
- Problem 6-6 Free Cash Flow Model (LO3,
CFA7)You are going to value Lauryn’s Doll Co. using the FCF model.
After consulting various sources, you find that Lauryn's has a
reported equity beta of 1.7, a debt-to-equity ratio of .7, and a
tax rate of 21 percent. Assume a risk-free rate of 3 percent and a
market risk premium of 8 percent. Lauryn’s Doll Co. had EBIT last
year of $59 million, which is net of a depreciation expense of...
You are going to value Lauryn’s Doll Co. using the FCF model. After consulting various sources,...
You are going to value Lauryn’s Doll Co. using the FCF model.
After consulting various sources, you find that Lauryn's has a
reported equity beta of 1.5, a debt-to-equity ratio of .5, and a
tax rate of 21 percent. Assume a risk-free rate of 5 percent and a
market risk premium of 8 percent. Lauryn’s Doll Co. had EBIT last
year of $47 million, which is net of a depreciation expense of $4.7
million. In addition, Lauryn's made $7.25 million...
You are going to value Lauryn’s Doll Co. using the FCF model. After consulting various sources,...
You are going to value Lauryn’s Doll Co. using the FCF model.
After consulting various sources, you find that Lauryn's has a
reported equity beta of 1.4, a debt-to-equity ratio of 0.4, and a
tax rate of 30 percent. Assume a risk-free rate of 3 percent and a
market risk premium of 7 percent. Lauryn’s Doll Co. had EBIT last
year of $45 million, which is net of a depreciation expense of $4.5
million. In addition, Lauryn's made $4.25 million...
You are going to value Lauryn’s Doll Co. using the FCF model. After consulting various sources,...
You are going to value Lauryn’s Doll Co. using the FCF model.
After consulting various sources, you find that Lauryn's has a
reported equity beta of 1.6, a debt-to-equity ratio of 0.4, and a
tax rate of 40 percent. Assume a risk-free rate of 5 percent and a
market risk premium of 12 percent. Lauryn’s Doll Co. had EBIT last
year of $51 million, which is net of a depreciation expense of $5.1
million. In addition, Lauryn's made $7.5 million...
You are going to value Lauryn’s Doll Co. using the FCF model. After consulting various sources,...
You are going to value Lauryn’s Doll Co. using the FCF model.
After consulting various sources, you find that Lauryn's has a
reported equity beta of 1.4, a debt-to-equity ratio of .7, and a
tax rate of 21 percent. Assume a risk-free rate of 4 percent and a
market risk premium of 11 percent. Lauryn’s Doll Co. had EBIT last
year of $44 million, which is net of a depreciation expense of $4.4
million. In addition, Lauryn's made $5.25 million...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- In the article from Forbes notes that the goal of a leader is not to clone...
- Many people keep time using a 24 hour clock (11 is 11am and 23 is 11pm,...
- UNIX ONLY -- DIFFICULT LAB ASSIGNMENT This is an extremely difficult subject for me. Could you...
- Do you know why your credit card can be refused even though you are profitable?
- The Following Java expression: S/10 * 10 + 10 – S = C Show that this...
- Year Cash Flow 0 −$9,700 1 5,800 2 2,500 3 3,400 &nb
- In a two – story building, an exterior column is to be designed for a service...
ADVERTISEMENT