Question
In: Finance
Maslyn Manufacturing has projected sales of $153 million next year. Costs are expected to be $82...
Maslyn Manufacturing has projected sales of $153 million next year. Costs are expected to be $82 million, and net investment is expected to be $15 million. Each of these values is expected to grow at 14 percent the following year, with the growth rate declining by 2 percent per year until growth rate reaches 6 percent, where it is expected to remain indefinitely. There are 6.2 million shares of stock outstanding and investors require a return of 12 percent return on the company's stock. The corporate tax rate is 40 percent. A. What is your estimate of the current stock price? B. Suppose instead that you estimate the terminal value of the company using a PE multiple. The industry PE multiple is 12. What is your new estimate of the company's stock price?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Fincher Manufacturing has projected sales of $147 million next year. Costs are expected to be $82...
Fincher Manufacturing has projected sales of $147 million next
year. Costs are expected to be $82 million and net investment is
expected to be $16 million. Each of these values is expected to
grow at 15 percent the following year, with the growth rate
declining by 2 percent per year until the growth rate reaches 7
percent, where it is expected to remain indefinitely. There are 6.5
million shares of stock outstanding and investors require a return
of 14 percent...
Full Boat Manufacturing has projected sales of $122.5 million next year. Costs are expected to be...
Full Boat Manufacturing has projected sales of $122.5 million
next year. Costs are expected to be $72.8 million and net
investment is expected to be $14.4 million. Each of these values is
expected to grow at 12 percent the following year, with the growth
rate declining by 2 percent per year until the growth rate reaches
4 percent, where it is expected to remain indefinitely. There are
6.2 million shares of stock outstanding and investors require a
return of 11...
Eberhart Manufacturing has projected sales of $145.8 million next year. Costs are expected to be $81.4...
Eberhart Manufacturing has projected sales of $145.8 million
next year. Costs are expected to be $81.4 million and net
investment is expected to be $15.4 million. Each of these valued is
expected to grow at 15 percent the following year, with the growth
rate declining by 2 percent per year until the growth rate reaches
7 percent, where it is expected to remain indefinitely. There are
5.9 million shares of stock outstanding and investors require a
return of 14 percent...
Fincher Manufacturing has projected sales of $147.2 million next year. Costs are expected to be $82.1...
Fincher Manufacturing has projected sales of $147.2 million next
year. Costs are expected to be $82.1 million and net investment is
expected to be $16.1 million. Each of these values is expected to
grow at 16 percent the following year, with the growth rate
declining by 2 percent per year until the growth rate reaches 8
percent, where it is expected to remain indefinitely. There are 6.6
million shares of stock outstanding and investors require a return
of 15 percent...
Fincher Manufacturing has projected sales of $147.2 million next year. Costs are expected to be $82.1...
Fincher Manufacturing has projected sales of $147.2 million next
year. Costs are expected to be $82.1 million and net investment is
expected to be $16.1 million. Each of these values is expected to
grow at 16 percent the following year, with the growth rate
declining by 2 percent per year until the growth rate reaches 8
percent, where it is expected to remain indefinitely. There are 6.6
million shares of stock outstanding and investors require a return
of 15 percent...
Full Boat Manufacturing has projected sales of $119 million next year. Costs are expected to be...
Full Boat Manufacturing has projected sales of $119 million next
year. Costs are expected to be $70 million and net investment is
expected to be $13.4 million. Each of these values is expected to
grow at 10 percent the following year, with the growth rate
declining by 1 percent per year until the growth rate reaches 6
percent, where it is expected to remain indefinitely. There are 5.5
million shares of stock outstanding and investors require a return
of 12...
Fincher Manufacturing has projected sales of $146.2 million next year. Costs are expected to be $81.6...
Fincher Manufacturing has projected sales of $146.2 million next
year. Costs are expected to be $81.6 million and net investment is
expected to be $15.6 million. Each of these values is expected to
grow at 16 percent the following year, with the growth rate
declining by 2 percent per year until the growth rate reaches 8
percent, where it is expected to remain indefinitely. There are 6.1
million shares of stock outstanding and investors require a return
of 15 percent...
Full Boat Manufacturing has projected sales of $123.5 million next year. Costs are expected to be...
Full Boat Manufacturing has projected sales of $123.5 million
next year. Costs are expected to be $73.6 million and net
investment is expected to be $14.8 million. Each of these values is
expected to grow at 14 percent the following year, with the growth
rate declining by 2 percent per year until the growth rate reaches
6 percent, where it is expected to remain indefinitely. There are
6.4 million shares of stock outstanding and investors require a
return of 11...
Full Boat Manufacturing has projected sales of $115 million next year. Costs are expected to be...
Full Boat Manufacturing has projected sales of $115 million next
year. Costs are expected to be $67 million and net investment is
expected to be $12 million. Each of these values is expected to
grow at 14 percent the following year, with the growth rate
declining by 2 percent per year until the growth rate reaches 6
percent, where it is expected to remain indefinitely. There are 5.5
million shares of stock outstanding and investors require a return
of 13...
Full Boat Manufacturing has projected sales of $117 million next year. Costs are expected to be...
Full Boat Manufacturing has projected sales of $117 million next
year. Costs are expected to be $68.4 million and net investment is
expected to be $12.8 million. Each of these values is expected to
grow at 10 percent the following year, with the growth rate
declining by 1 percent per year until the growth rate reaches 6
percent, where it is expected to remain indefinitely. There are 5.1
million shares of stock outstanding and investors require a return
of 13...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Note: The answers to the following questions should be typed in the block of comments in...
- Python Describe the procedure for setting up the display of an image in a window.
- what are the fundamental similarity and differences between gap and dgap?
- Maria Gonzales is a 57-year-old operating room nurse who works full-time at a local hospital. She...
- Use the bond term's below to answer the question Maturity 7 years Coupon Rate 4% Face...
- What experience have you had with Organization Development or with Change Management? Describe the organization, the...
- 1. Renfro Rentals has issued bonds that have a 12% coupon rate, payable semiannually. The bonds...
ADVERTISEMENT