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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 0.4, and a tax rate of 30 percent. Assume a risk-free rate of 5 percent and a market risk premium of 7 percent. Lauryn’s Doll Co. had EBIT last year of $46 million, which is net of a depreciation expense of $4.6 million. In addition, Lauryn's made $6.25 million in capital expenditures and increased net working capital by $3.6 million. Assume the FCF is expected to grow at a rate of 3 percent into perpetuity. What is the value of the firm?
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Expert Solution
Please refer to below spreadsheet for calculation and answer. Cell reference also provided.
Cell reference -
jeff jeffy answered 2 days agoRelated Solutions
You are going to value Lauryn’s Doll Co. using the FCF model. After consulting various sources,...
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You are going to value Lauryn’s Doll Co. using the FCF model. After consulting various sources,...
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You are going to value Lauryn’s Doll Co. using the FCF model. After consulting various sources,...
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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,...
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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...
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 1.7, a debt-to-equity ratio of 0.4, and a
tax rate of 30 percent. Assume a risk-free rate of 6 percent and a
market risk premium of 11 percent. Lauryn’s Doll Co. had EBIT last
year of $56 million, which is net of a depreciation expense of $5.6
million. In addition, Lauryn's made $5.3 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 1.5, a debt-to-equity ratio of 0.3, and a
tax rate of 40 percent. Assume a risk-free rate of 4 percent and a
market risk premium of 12 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...
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