It is known that PT Bae Suzy's Cash Flow from Assets (CFFA) at the end of 2021 is IDR 250,000,000,-; The CFFA is estimated to grow forever by 3%. So what is the Company Value of PT Bae Suzy at the end of 2021? You are also supported with the following data: 1.Yield government bond : 5% 2. state bond coupon : 6% 3.Expected Market return : 16% 4.Beta PT Bae Suzy : 1,2 5.Cost of debt :9% 6.Tax rate :25% 7. Debt to Equity Ratio : 1,3

It is known that PT Bae Suzy's Cash Flow from Assets (CFFA) at the end of 2021 is IDR 250,000,000,-; The CFFA is estimated to grow forever by 3%. So what is the Company Value of PT Bae Suzy at the end of 2021? You are also supported with the following data: 1.Yield government bond : 5% 2. state bond coupon : 6% 3.Expected Market return : 16% 4.Beta PT Bae Suzy : 1,2 5.Cost of debt :9% 6.Tax rate :25% 7. Debt to Equity Ratio : 1,3

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter21: Dynamic Capital Structures And Corporate Valuation

Section: Chapter Questions

Problem 9P

See similar textbooks

Similar questions

Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1 and by 5% in Year 2. Its operating profitability ratio (OP) is 10%, and its capital requirement ratio (CR) is 80%? What are the projected sales in Years 1 and 2? What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2? What is the projected FCF for Year 2?
Sisters Ltd is planning to invest in a capital project, which will generate cash inflows of $15,000 in the 1st year, $22,000 in the 2nd year, and $25,000 in the 3rd year. The project ends after year 3. The company’s current debt to equity ratio is 0.8 with the cost of debt of 8% p.a. compounded annually. Sisters Ltd stock has a beta of 1.2. The risk-free rate is3% p.a. compounded annually and the expected market return is 12% p.a. compounded annually. The cost of equity of 10.5% p.a. compounded annually. The new debt to equity ratiois 1. What is the total present value of the project’s cash inflows?
An analyst is trying to estimate the intrinsic value of the stock of ATR Kim Eng. The analyst estimates that ATR Kim Eng's free cash flow during the next year will be P25 million. The analyst also estimates that the company's free cash flow will increase at a constant rate of 7% a year and that the company's WACC is 10%. ATR Kim Eng has P200 million of long-term debt and preferred stock and 30 million outstanding shares of common stock. What is the estimated per-share price of ATR Kim Eng's common stock? 27.78 21.11 8.33 34.43
An analyst is trying to estimate the intrinsic value of the stock of ATR Kim Eng. The analyst estimates that ATR Kim Eng’s free cash flow during the next year will be P25 million. The analyst also estimates that the company’s free cash flow will increase at a constant rate of 7% a year and that the company’s WACC is 10%. ATR Kim Eng has P200 million of long-term debt and preferred stock and 30 million outstanding shares of common stock. What is the estimated per-share price of ATR Kim Eng’s common stock? Group of answer choices P21.11 P27.78 P34.43 P8.33
SLMA Corp. for the last ten years, has earned and had cash flows of about P600,000 every year. As per the predictions of the company'searnings, the same cash flow would continue for the foreseeable future. The expenses for the business every year is about P500,000only. Based on the available public information a P4 million Treasury bond has a prevailing return of P40,000 quarterly. Using Capitalization of Earnings approach, assuming SLMA would sell 20% of its shareholdings, what will be the minimum selling price? a. 2,500,000 b. 500,000 c. 1,500,000 d. 1,000,000
SLMA Corp. for the last ten years, has earned and had cash flows of about P600,000 every year. As per the predictions of the company'searnings, the same cash flow would continue for the foreseeable future. The expenses for the business every year is about P500,000only. Based on the available public information a P4 million Treasury bond has a prevailing return of P40,000 quarterly. Using Capitalization of Earnings approach, assuming SLMA would sell 20% of its shareholdings, what will be the minimum selling price? ANSWER: 2,500,000 provide the solution please
a) At the end of its financial year 2021, an analyst made the following forecast for Next plc for financial years 2022 – 2025 (in millions of pounds): Year Cash In-flows from Operations £ Cash Out-flows Investment £ 2022 2560 1200 2023 3420 1500 2024 3500 2400 2025 3600 2000 Next plc reported £5500 million in total debt at the end of 2021. Required:I. Use a required rate of return of 10% to calculate both the enterprise value and equity value for Next plc at the end of 2021 under the following two scenarios for the…
Other relevant information about the company follows: The 20-year Treasury Bond rate is currently 4.5 percent and you have estimated market-risk premium to be 6.75 percent using the returns on stocks and Treasury bonds from 2010 to 2019. Pharmos Incorporated has a marginal tax rate of 25 percent. Based on the statement is the photos attached and above, asnwer the following question Determine the initial outlay of the project. Calculate the annual after-tax operating cash flow for Years 1 -5.
One-year estimates suggest that Mulligan Manufacturing (MM) has a 20% probability of being worth $100 million, a 50% probability of being worth $200 million, a 10% probability of being worth $330 million and a 20% probability of being worth $400 million. The firm has two discount bonds outstanding: a senior bond outstanding with a face value of $100 million and a promised rate of return of 5% and a junior bond outstanding with a face value of $40 million and a promised return of 20%. If the firms required rate of return its assets is 12%, then what is the firm’s levered cost of equity?
Mary, Inc. is considering a project for next year, which will cost $5 million. Mary plans to use the following combination of debt and equity to finance the investment. Issue $1.5 million of 10-year bonds at a price of 101, with a coupon/contract rate of 4%, and flotation costs of 2% of par. Use $3.5 million of funds generated from retained earnings. The equity market is expected to earn 8%. U.S. Treasury bonds are currently yielding 3%. The beta coefficient for Mary, Inc. is estimated to be .70. Mary is subject to an effective corporate income tax rate of 30 percent. Compute Mary's expected rate of return using the Capital Asset Pricing Model (CAPM). Please show calculations.
A firm has equity with market value $100 million and debt with market value at $70 million. The debt pays perpetual expected coupons of $3.5 million annually. The above numbers are prior to a stock buyback being announced. The firm uses some of its cash buyback stock on of $20 million. As a result of the fall in its cash, the expected coupon payment to debt reduce to $3.4 million (expected payments is the probability weighted future coupons, and the probability that in some future states of the world the firm would default has increased due to the the stock buyback). Also the rate of discount Rd for expected coupons paid to debt rises to 5.35%. Assume Modigliani-Miller is true (which also means there are no taxes). What will be the value of Equity after the stock buyback? (Do not include the $20 million that is paid to the Equity holders.)
Other relevant information about the company follows: The 20-year Treasury Bond rate is currently 4.5 percent and you have estimated market-risk premium to be 6.75 percent using the returns on stocks and Treasury bonds from 2010 to 2019. Pharmos Incorporated has a marginal tax rate of 25 percent. Based on the statement is the photos attached and above, asnwer the following question Determine the initial outlay of the project. Calculate the annual after-tax operating cash flow for Years 1 -5. NO EXCEL SHOW FULL WORKINGS