Question
In: Finance
Union Pacific Rail road reported net income of $770million after interest expenses of $320 million in...
Union Pacific Rail road reported net income of
$770million after interest expenses of $320 million in a recent
financial year. The corporate tax rate was 36%. It reported
depreciation of $960 million in that year, and capital spending of
$1.2billion. The firm also had $4billion in debt outstanding on the
books, was rated AA (carrying a yield to maturity of 8%), and was
trading at par (up from $3.8 billion at the end of the previous
year). The beta of the stock is 1.05, and there were 200 million
shares outstanding (trading at $60 per share), with a book value of
$5 billion. Union Pacific paid 40% of its earnings as dividends and
working capital requirements are negligible. (The Treasury bond
rate is 7%.) You are required to
a. Estimate the Free Cash Flow to the Firm (FCF)
b. Estimate the value of the firm now.
c. Estimate the value of equity and the value per share now.
Solutions
jeff jeffy answered 1 year agoRelated Solutions
"Noncontrolling interest": is a component of the parent company's net income and reported on the income...
"Noncontrolling interest":
is a component of the parent company's net income and reported
on the income statement.
is a component of stockholders' equity attributable to the
parent company and reported on the balance sheet.
is the portion of equity in a subsidiary not attributable,
directly or indirectly, to the parent company, and reported on the
balance sheet within equity, but separate from the parent company's
equity.
is not reported within the parent company's consolidated
financial statements, but instead reported within...
Based on the following transactions, calculate the revenues, expenses, and net income that would be reported...
Based on the following transactions, calculate the
revenues, expenses, and net income that would be
reported on (a) the cash basis and (b) the
accrual basis:
i. Inventory costing $70,000 was purchased on
account.
ii. Inventory costing $60,000 was sold for
$100,000. Eighty percent of the sales were for cash.
iii. Cash collected from credit customers
(those who bought on account) totalled $20,000.
iv. A lease was signed at the beginning of the
year, requiring monthly payments of $1,000. The...
Based on the following transactions, calculate the revenues, expenses, and net income that would be reported...
Based on the following transactions, calculate the revenues,
expenses, and net income that would be reported on (a) the cash
basis and (b) the accrual basis:
i. Inventory costing $70,000 was purchased on
account.
ii. Inventory costing $60,000 was sold for
$100,000. 80% of the sales were for cash.
iii. Cash collected from credit customers
(those who bought on account) totalled $20,000.
iv. A lease was signed at the beginning of the
year, requiring monthly payments of $1,000. The rent...
Cullumber Corporation recently reported an EBITDA of $30.70 million and net income of $9.7 million. The...
Cullumber Corporation recently reported an EBITDA of $30.70
million and net income of $9.7 million. The company had $6.8
million in interest expense, and it's average corporate tax rate
was 35 percent. What was its depreciation and amortization expense?
(Round answer to 2 decimal places and enter your answer
in dollars, e.g. 9,700,000.25)
Patterson Brothers recently reported an EBITDA of $14.5 million and net income of $4.35 million. It...
Patterson Brothers recently reported an EBITDA of $14.5 million
and net income of $4.35 million. It had $1.5 million of interest
expense, and its corporate tax rate was 25%. What was its charge
for depreciation and amortization? Write out your answer
completely. For example, 25 million should be entered as
25,000,000. Do not round intermediate calculations. Round your
answer to the nearest dollar, if necessary.
Patterson Brothers recently reported an EBITDA of $5.5 million and net income of $0.825 million. It...
Patterson Brothers recently reported an EBITDA of $5.5 million
and net income of $0.825 million. It had $1.5 million of interest
expense, and its corporate tax rate was 25%. What was its charge
for depreciation and amortization? Write out your answer
completely. For example, 25 million should be entered as
25,000,000. Do not round intermediate calculations. Round your
answer to the nearest dollar, if necessary.
$
Cox Corporation recently reported an EBITDA of $61 million and $10 million of net income.
Cox Corporation recently reported an EBITDA of $61 million
and $10 million of net income. The company has $15 million interest
expense and the corporate tax rate is 40.0% percent. What was the
company's depreciation and amortization expense? (Answers are in $
millions.)$56.00$46.00$51.00$36.00$29.33
Patterson Brothers recently reported an EBITDA of $19.5 million and net income of $3.9 million. It...
Patterson Brothers recently reported an EBITDA of $19.5 million
and net income of $3.9 million. It had $1.5 million of interest
expense, and its corporate tax rate was 25%. What was its charge
for depreciation and amortization? Write out your answer
completely. For example, 25 million should be entered as
25,000,000. Do not round intermediate calculations. Round your
answer to the nearest dollar, if necessary.
Nicholas Health Systems recently reported an EBITDA of $25.0 million and net income of $15.8 million....
Nicholas Health Systems recently reported an EBITDA of $25.0
million and net income of $15.8 million. It had $2.0 million of
interest expense, and its federal tax rate was 21% (ignore any
possible state corporate taxes). What was its charge for
depreciation and amortization?
Cox Corporation recently reported EBITDA of $22.5 million and $5.4 million of net income. The company...
Cox Corporation recently reported EBITDA of $22.5 million and
$5.4 million of net income. The company has $6 million interest
expense and the corporate tax rate is 25 percent. What was the
company's depreciation and amortization expense? Show work.
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