A company is projected to have a free cash flow of $357 million next year, growing at a 4.4% rate until the end of year 3. After that, cash flows are expected to grow at a stable rate of 2.4%. The company's cost of capital is 9.3%. The company owes $129 million to lenders and has $8 million in cash. If it has 279 million shares outstanding, what is your estimate for its stock price? Round to one decimal place.

Q: What is the current value per share?

A: The current value per share means the price of share prevailing in the market. The discount rate is…

Q: Grand Bank is a mature bank, in stable growth. The bank is expected to report net income of $107…

A: The question gives eth following information:

Q: Suppose you are valuing a company that is growing its free cash flows at a stable 1.6% annual rate…

A: In this problem we have to calculate present value of cash flow and find out value of equity.

Q: Kinkead Inc. forecasts that its free cash flow in the coming year, i.e., at t = 1, will be −$10…

A: Value of Firm = FCF1/(1+WACC)^1 +FCF2/(1+WACC)^2 +Terminal Flow/(1+WACC)^2 FCF1 = -$10 million FCF2…

Q: The following are the projected cash flows to the firm over the next five years:    Year Cash…

A: Cost of capital = 12%  Growth rate = 4%

Q: Analysts predict that Burks Corporation will have free cash flows (FCFs) of negative $20 million at…

A: WACC is 11% Net Debt is $30million Stocks outstanding is 3 milllion   To Find: current price per…

Q: The following are the projected cash flows to the firm over the next five years:    Year Cash…

A: given, WACC (r) =12% Growth (g) =4% Year  cashflow 1 $120 2 $145 3 $176 4 $199 5 $245…

Q: Crazytown Motors is expected to have an EBIT of $680,000 next year. Depreciation, the increase in…

A: EBIT Year 1 = $680,000 Depreciation = $45,000 Increase in Net working capital = $9,000 Capital…

Q: Tin Roof's net cash flows for the next three years are projected at $72,000, $78,000, and $84,000,…

A: Year Cash flows 1 72000 2 78000 3 84000   Capital Cost Weight Debt 6.20% 30% Equity…

Q: A stock market analyst has forecasted the following year-end numbers for Raedebe Technology.  Sales…

A: Free cash flow (FCF) represents the cash a company generates after accounting for cash outflows to…

Q: Corner Company is estimated to generate $18 million in available cash flow in the first year, and…

A: First year cash inflow  = $ 18,000,000 Annual growth rate (G) = 5% WACC = 9% Number of shares (N) =…

Q: Suppose that TV Industries, Inc. currently has the balance sheet shown as follows, and that sales…

A: The question is based on the calculation of additional fund need to fulfill the requirement to…

Q: Marshall Law firm expects to generate free-cash flows of $200,000 per year for the next five years.…

A: Given information: Cash flows generated amounted to $200,000 for 5 years Growth rate is 5% WACC is…

Q: For 2020 the free cash flow to the firm (FCFF) of ABC Co. was ₱30,000. The firm has total debt of…

A: The intrinsic value per share can be calculated from free cash flow model of equity valuation

Q: The Bank of America is considering its dividend policy. It can either choose to pay a total dividend…

A: Value of Stock = Present value of cash flows  Required return is 15% per annum i.e 3.75% per quarter

Q: A firm expects to generate $100 million in free cash flow in a year.  This free cash flow is…

A: Calculation of the worth of the firm’s common stock is shown: Hence, the value of common stock is…

Q: Storico Co. just paid a dividend of $1.45 per share. The company will increase its dividend by 24…

A: D0 = $1.45;Year1 growth rate = g1 = 24%;Year 2 growth rate, g2 = g1 - 6% = 24% - 6% = 18%Year 3…

Q: AFW Industries has 182 million shares outstanding and expects earnings at the end of this year of…

A: We need to use constant growth model to calculate stock price. The formula is Share Price(P0) =D1r-g…

Q: The following are the projected cash flows to the firm over the next five years: Year Cash Flows to…

A: Value of firm = Present value of cash inflows + Perpetual cash inflow / ( WACC - Growth rate ) * ( 1…

Q: What is the firm's estimated intrinsic value per share of common stock?

A: Information Provided: WACC = 10% FCF 1 = $70 million Growth rate = 5% Long term debt & Preferred…

Q: A company is forecasted to generate free cash flows of $64 million for the next three years. After…

A: Free cash flow valuation model for value of equity consider the present value of all future cash…

Q: ABC currently produces annual free cash flows of 5 billion a year. The company has long-term debt of…

A: Enterprise value of a firm is calculated as Equity value plus debt minus cash as follows: Present…

Q: Analysts expect the Cornhusk Bank to generate $99.825 million of free cash flow at the end of the…

A: WACC is the overall cost of the company including cost of equity and cost of debt.

Q: Barclay’s Couches Inc. has 80 million shares trading at $ 10 a share and $ 250 million in debt…

A: Price of share can be computed by using dividend discount model where share price indicates future…

Q: Portage Bay Enterprises has $4 million in excess cash, no debt, and is expected to have free cash…

A: Data given:   Excess cash= $4 million Debt= nil Expected free cash flow next year = $ 14 million…

Q: MacJolly Corporation is expecting a cash flow of P3,000,000 next year and it is expected to…

A: The value of the company refers to the present value of free cash flows that are expected to be…

Q: VioletRichGold Company has been growing at a rate of 6 percent for the past two years, and the…

A: Dividend is the amount which is paid by a firm to their shareholders for the amount invested by…

Q: A company is forecasted to generate free cash flows of $49 million for the next three years. After…

A: Given Free cash flow = $49 million Debt =$42 million Cash =$ 6 million Share outstanding = 14…

Q: VWX Inc., has sales of $500,000, net income of $80,000, dividend payout of 50%, total assets of…

A: Sales are $500,000 Net income is $80,000. Dividend payout ratio is 50%. Total assets are $700,000…

Q: Antivirus Inc. expects its sales next year to be $3,100,000. Inventory and accounts receivable will…

A: Given, Expected sales next year = $3,100,000 Increase in inventory and accounts = $540,000 Profit…

Q: CSL Corporation is a mid-sized transportation firm with 10 million shares outstanding, trading at $…

A: Cost of capital is defined as the cost, which represents the company's return for achieving for the…

Q: Grand Bank is a mature bank, in stable growth. The bank is expected to report net income of $107…

A: Book value of equity will be present value of dividends today.

Q: Suppose you are valuing a company that is growing its free cash flows at a stable 2.4% annual rate…

A: Free cash how next year FcF1 =$162 million growth rate g=2.4% cost of capital=9.8% =firm value=Fc…

Q: Your company has expected future cash flows of $70 million in perpetuity. The company's WACC is…

A: Cashflow in perpetuity = $70 million WACC =12.8% So, Enterprise value = Cashflow/WACC = 70/0.128 =…

Q: A company is forecasted to generate free cash flows of $29 million next year and $29 million the…

A: The total cash that a company has to pay off to its liabilities and dividend to its shareholders is…

Q: An investor estimates that next year’s sales for Dursley’s Hotels, Inc. should amount to about $100…

A: 1. Net income = Sales * Net profit margin %

Q: The analyst estimates that after three years the National Inc’s free cash flow will grow at a…

A: The value of company can be calculated as per the free cash flow valuation model

Q: STARS Inc. forecasts a positive Free Cash Flow for the coming year, with FCF1 = $10,000,000, and it…

A: Calculations are as below-

Q: Pearl Corp. is expected to have an EBIT of $2,900,000 next year. Depreciation, the increase in net…

A: EBIT Year 1 = $2,900,000 Depreciation = $160,000 Increase in Net working capital = $130,000 Capital…

Q: Kosm Inc. forecasts a positive Free Cash Flow for the coming year, with FCF1 = $10,000,000, and it…

A: Formulas:

Q: Scampini Technologies is expected to generate $175 million in free cash flow next year, and FCF is…

A: Corporate Valuation Models deals with computation of value of a corporate or business entity with…

Q: Young & Liu Inc.'s free cash flow during the just-ended year (t = 0) was $125 million, and FCF is…

A: The question gives the following information:

Q: Dewey Corp. is expected to have an EBIT of $2,850,000 next year. Depreciation, the increase in net…

A: Company's stock :- A stock (also referred to as equity) is a type of security that represents…

Q: Scarab Technologies is expected to generate $175 million in free cash flow next year, and FCF is…

A: Free cash flow next year = 175 million Growth rate = 7% WACC=10% Share outstanding = 45million

Q: Hadley Inc. forecasts the year-end free cash flows (in millions) shown below. Year 1 2 3 4 5 FCF…

A: YEAR FCF     1 -22.95 2 37.90 3 43.00 4 51.20 5 55.20 grow rate = 4% Debt = 26…

Q: Portage Bay Enterprises has $2 million in excess cash, no debt, and is expected to have free cash…

A: To calculate the equity value of the firm and the stock price we need to calculate the enterprise…

Q: Keraz Inc. has recently reported a Free Cash Flow (FCF) of $21.5 million. The CFO expects that FCF…

A: The question is based on the concept of valuation of project based on the constant growth model.…