Question
In: Finance
2. D Tires’ free cash flow was just FCF0 = $1.32. Analysts expect the company's free...
2. D Tires’ free cash flow was just FCF0 = $1.32. Analysts expect the company's free cash flow to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The WACC for this company 9.00%. D has $4 million in short-term investments and $14 million in debt and 1 million shares outstanding. What is the stock price at year 2? What is the best estimate of the stock's current intrinsic price? If the market price is $33 do you buy or sell? Include the excel formulas please.
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Burke Tires just paid a dividend of D 0 = $1.32. Analysts expect the company's dividend...
Burke Tires just paid a dividend of D 0 = $1.32. Analysts expect
the company's dividend to grow by 30% this year, by 10% in Year 2,
and at a constant rate of 6% in Year 3 and thereafter. The required
return on this low-risk stock is 9.00%. What is the best estimate
of the stock's current market value?
a. $53.75
b. $52.65
c. $59.30
d. $51.59
A company’s free cash flow was just FCF0 = $5.92million. The weighted average cost of...
A company’s free cash flow was just FCF0 = $5.92
million. The weighted average cost of capital is WACC = 13%, and the constant growth rate is g = 5%. What is the
current value of operations?
A company’s free cash flow was just FCF0 = $6.69 million. The weighted average cost of...
A company’s free cash flow was just FCF0 = $6.69
million. The weighted average cost of capital is
WACC = 14%, and the constant growth rate is g = 6%. What is the
current value of operations?
ABC’s the most recent free cash flow (FCF0) is $200 million. The free cash flow is...
ABC’s the most recent free cash flow (FCF0) is $200 million. The
free cash flow is expected to grow at a rate of 40 percent, and 20
percent in the second year. After two years, it is expected to grow
forever at a constant rate of 5 percent. The cost of common stock
(rs) is 12% and the weighted average cost of capital (WACC) is 9%.
ABC balance sheet shows $20 million in short term investments that
are unrelated to...
A company's most recent annual Free Cash Flow is $180,000,000. Free cash flow is expected to...
A company's most recent annual Free Cash Flow is $180,000,000.
Free cash flow is expected to grow by 15% per year for the next 10
years and then grow by 3% per year thereafter. Investors required
rate of return is 11%. What is the current value of the stock?
a. $11,300,755,080
b. $2,250,000,000
c. $5,404,011,121
d. $1,636,363,636
Nachman Industries just paid a dividend of D0 = $2.50. Analysts expect the company's dividend to...
Nachman Industries just paid a dividend of D0 =
$2.50. Analysts expect the company's dividend to grow by 30% this
year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and
thereafter. The required return on this low-risk stock is 9.00%.
What is the best estimate of the stock’s current market value? Do
not round intermediate calculations.
Please show work
Nachman Industries just paid a dividend of D0 = $2.50. Analysts expect the company's dividend to...
Nachman Industries just paid a dividend of D0 =
$2.50. Analysts expect the company's dividend to grow by 30% this
year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and
thereafter. The required return on this low-risk stock is 9.00%.
What is the best estimate of the stock’s current market value? Do
not round intermediate calculations.
neno Industries just paid a dividend of $1.30. Analysts expect the company's dividend to grow by...
neno Industries just paid a dividend of $1.30. Analysts expect
the company's dividend to grow by 15 percent for 3 years and then
the rate of growth changes to 5 percent per year from Year 4
onwards. The required rate of return is 8 percent. What is the
total present value of the dividends for the first 3 years i.e. for
stage I?
neno Industries just paid a dividend of $1.30. Analysts expect
the company's dividend to grow by 15...
Stetson Inc just paid a dividend of D0 = $1.23. Analysts expect the company's dividend to...
Stetson Inc just paid a dividend of D0 = $1.23. Analysts expect
the company's dividend to grow by 25% this year, by 20% in Year 2,
12% in Year 3 and at a constant rate of 5% in Year 4 and
thereafter. The required return on this low-risk stock is 9.00%.
What is the best estimate of the stock's current market value?
Brook Corporation's free cash flow for the current year (FCF0) was $4.00 million. Its investors require...
Brook Corporation's free cash flow for the current year
(FCF0) was $4.00 million. Its investors require a 15%
rate of return on Brooks Corporation stock (WACC = 15%). What is
the estimated value of the value of operations if investors expect
FCF to grow at a constant annual rate of (1) - 5%, (2) 0%, (3) 3%,
or (4) 14%? Do not round intermediate calculations. Enter your
answers in millions. For example, an answer of $1 million should be
entered...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Large lots are desirable in supply chain coordination despite increasing holding costs.
- ***Convert the C++ to Python*** #include <iostream> using std::cout; using std::cin; using std::endl; int charClass; char...
- Make-or-Buy Decision Fremont Computer Company has been purchasing carrying cases for its portable computers at a...
- The following costs were incurred for the single product produced during the first year of operations...
- Non-constant growth model: Do=$2.00 required return on equity= 5% g= 9% n=1,2 g=7% n=3,4 g=3% n=5...
- . Find all x ∈ Z143 such that x2Ξ 7 (mod 143). Please explain all steps...
- #Python: A palindrome is a sequence of characters that reads the same backwards as forwards. For...
ADVERTISEMENT