Assume that today is December 31, 2021, and that the following information applies to Abner Airlines: After-tax operating income [EBIT(1 T)] for 2022 is expected $450 million. The depreciation expense for 2022 is expected to be $80 million. The capital expenditures for 2022 are expected to be $225 million. No change is expecte net operating working capital. The free cash flow is expected to grow at a constant rate of 3% per year. The required return on equity is 16%. The WACC is 9%. The has $192 million of nonoperating assets. The market value of the company's debt is $2.580 billion. 150 million shares of stock are outstanding. Using the corporate valu model approach, what should be the company's stock price today? Do not round intermediate calculations. Round your answer to the nearest cent.

Assume that today is December 31, 2021, and that the following information applies to Abner Airlines: After-tax operating income [EBIT(1 T)] for 2022 is expected $450 million. The depreciation expense for 2022 is expected to be $80 million. The capital expenditures for 2022 are expected to be $225 million. No change is expecte net operating working capital. The free cash flow is expected to grow at a constant rate of 3% per year. The required return on equity is 16%. The WACC is 9%. The has $192 million of nonoperating assets. The market value of the company's debt is $2.580 billion. 150 million shares of stock are outstanding. Using the corporate valu model approach, what should be the company's stock price today? Do not round intermediate calculations. Round your answer to the nearest cent.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter9: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 1P: Broussard Skateboard’s sales are expected to increase by 15% from $8 million in 2018 to $9.2 million...

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Assume that today is December 31, 2021, and that the following information applies to Abner Airlines: ⚫ After-tax operating Income [EBIT(1-T)] for 2022 is expected to be $500 million. The depreciation expense for 2022 is expected to be $160 million. The capital expenditures for 2022 are expected to be $375 million. . No change is expected in net operating working capital. ⚫ The free cash flow is expected to grow at a constant rate of 7% per year. ⚫The required return on equity is 15%. The WACC is 10%. The firm has $204 million of nonoperating assets. ⚫ The market value of the company's debt is $2.885 billion. 190 million shares of stock are outstanding. Using the corporate valuation model approach, what should be the company's stock price today? Do not round intermediate calculations. Round your answer to the nearest cent.
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