I need to know about equations used and how to by hand! A. Quantitative Problem 1:...

I need to know about equations used and how to by hand!

A. Quantitative Problem 1: Assume today is December 31, 2013. Barrington Industries expects that its 2014 after-tax operating income [EBIT(1 – T)] will be $400 million and its 2014 depreciation expense will be $60 million. Barrington's 2014 gross capital expenditures are expected to be $100 million and the change in its net operating working capital for 2014 will be $30 million. The firm's free cash flow is expected to grow at a constant rate of 4.5% annually. Assume that its free cash flow occurs at the end of each year. The firm's weighted average cost of capital is 8.1%; the market value of the company's debt is $2.75 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. Using the corporate valuation model, what should be the company's stock price today (December 31, 2013)? Round your answer to the nearest cent. Do not round intermediate calculations. __________ $ per share

B. Quantitative Problem 2: Hadley Inc. forecasts the year-end free cash flows (in millions) shown below. Year 1 2 3 4 5 FCF -$22.32 $38.4 $43.1 $51.9 $56.2 The weighted average cost of capital is 12%, and the FCFs are expected to continue growing at a 4% rate after Year 5. The firm has $24 million of market-value debt, but it has no preferred stock or any other outstanding claims. There are 19 million shares outstanding. What is the value of the stock price today (Year 0)? Round your answer to the nearest cent. Do not round intermediate calculations. $ per share

C. According to the valuation models developed in this chapter, the value that an investor assigns to a share of stock is dependent on the length of time the investor plans to hold the stock. The statement above is (True/Flase) ?

Expert Solution

Answer for A.

All values in $ million except share price

Answer B.

All values in $ million except share price

Answer for C.

False. Since, an investor vales the business based on present value, there is no time frame for the decision. It's based on assumption that if the current price is less than DCF, then the market will rationalize and value of share will increase, hence, the investor will buy the share

jeff jeffy answered 2 years ago

I don't know how to solve this accounting problem. The problem is about Variance Analyses. Problem:...

I don't know how to solve this accounting problem. The problem is about Variance Analyses. Problem: Materials, Labor and Factory Overhead.(CPA, adapted) The Palmtown Furniture Company uses a standard cost system in accounting for its production costs. The standard cost of a unit of furniture follows: Lumber, 100 feet @$150 per 1,000 feet $15.00 Direct labor, 4 hours @ 2.50 per hour 10.00 Factory overhead: Fixed (30% of direct labor) $3.00 Variable (60% of...

I need to know how to figure this problem by doing in excel. Hypertensive Status by...

I need to know how to figure this problem by doing in excel. Hypertensive Status by Clinical Trial Site--Observed: Site Hypertensive 1 2 3 Yes 17 23 35 No 83 77 65 Question: Data from 300 patients recruited for a clinical trial. The trial recruited patients from three different sites. Use this data to determine if there is a difference in the number of hypertensive patients across clinical sites. Interpret your results. Is the p-value calculated significant?

Hi, I need to find the current ratio and the acid-test ratio. I know the equations...

Hi, I need to find the current ratio and the acid-test ratio. I know the equations for both, but have been having difficulties with calculating the correct answer Unadjusted Trial Balance Account Debit Credit Cash -350 Merch. Inv. 12,000 Store Supplies 5,900 Prepaid Ins 2,500 Store Equip 42,900 Accumulated depreciation - Store Equip. 16,250 Accounts Payable 15,000 Capital 17,000 Withdrawls 2,100 Sales 114,550 Sales Discounts 1,800 Sales Returns & Allowances 2,050 Cost of Goods Sold 38,000 Depreciation Exp. - Store...

I need the solution by Hand since I have no idea About Excel and am not...

I need the solution by Hand since I have no idea About Excel and am not allowed to use it on the exam. TIA 1. What is the beta of firm XXX over a 6 month period ? Could you please explain very thoroughly and step-by-step. I really struggle with the topic yet Average month market return: 1/1/1/-1/-1/-1 Average stock Price changes: 2/0/1/-1/0/-2

What do I need to know about this question?"Know what the Prisoner’s Dilemma is and...

Know what the Prisoner’s Dilemma is and be able to explain how it relates to collective action problems in world politics. Also, you should be able to evaluate the Kantian peace argument.

I know this is a long problem but I couldn't break it up because you need...

I know this is a long problem but I couldn't break it up because you need all the information. But it is only counted as one question on my homework. Fuming because you are stuck in traffic? Roadway congestion is a costly item, both in time wasted and fuel wasted. Let x represent the average annual hours per person spent in traffic delays and let y represent the average annual gallons of fuel wasted per person in traffic delays. A...

Hello, i would like to know about what do i need to know post surgical nursing...

Hello, i would like to know about what do i need to know post surgical nursing intervention and teaching patient. Cataract,BPH, Glucoma. Thank you.

Quantitative Problem: You need $11,000 to purchase a used car. Your wealthy uncle is willing to...

Quantitative Problem: You need $11,000 to purchase a used car. Your wealthy uncle is willing to lend you the money as an amortized loan. He would like you to make annual payments for 4 years, with the first payment to be made one year from today. He requires a 9% annual return. What will be your annual loan payments? Do not round intermediate calculations. Round your answer to the nearest cent. $ How much of your first payment will be...

Quantitative Problem: You need $10,000 to purchase a used car. Your wealthy uncle is willing to...

Quantitative Problem: You need $10,000 to purchase a used car. Your wealthy uncle is willing to lend you the money as an amortized loan. He would like you to make annual payments for 5 years, with the first payment to be made one year from today. He requires a 5% annual return. What will be your annual loan payments? Do not round intermediate calculations. Round your answer to the nearest cent. $ How much of your first payment will be...

Statement: I do not need to know accounting. I can hire an accountant. Problem statement: If...

Statement: I do not need to know accounting. I can hire an accountant. Problem statement: If you do not know accounting, how do you know your business is performed effectively? Open ended questions: The impact of disruptive technologies on accounting education, how should you as a business and technology student adapt? (100-500 words) accounting practice, how should you as a business and technology student get ready for working? (100-500 words) business practice, how should business can get ready for the...

Question