Praxis Corp. is expected to generate a free cash flow (FCF) of $12,975.00 million this year (FCF₁ = $12,975.00 million), and the FCF is expected to grow at a rate of 21.40% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 2.82% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Praxis Corp.’s weighted average cost of capital (WACC) is 8.46%, what is the current total firm value of Praxis Corp.? (Note: Round all intermediate calculations to two decimal places.) a. $376,289.47 million b. $388,953.45 million c. $313,574.56 million d. $40,340.86 million Praxis Corp.’s debt has a market value of $235,181 million, and Praxis Corp. has no preferred stock. If Praxis Corp. has 450 million shares of common stock outstanding, what is Praxis Corp.’s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.) a. $173.21 b. $522.62 c. $174.21 d. $191.63 Praxis Corp. is expected to generate a free cash flow (FCF) of $12,975.00 million this year (FCF1 = $12,975.00 million), and the FCF is expected togrow at a rate of 21.40% over the following two years (FCF2 and FCF:). After the third year, however, the FCF is expected to grow at a constant rateof 2.82% per year, which will last forever (FCF-). Assume the firm has no nonoperating assets. If Praxis Corp.'s weighted average cost of capital(WACC) is 8.46%, what is the current total firm value of Praxis Corp.? (Note: Round all intermediate calculations to two decimal places.)O $376,289.47 million$388,953.45 million$313,574.56 million$40,340.86 millionPraxis Corp.'s debt has a market value of $235,181 million, and Praxis Corp. has no preferred stock. If Praxis Corp. has 450 million shares of commonstock outstanding, what is Praxis Corp.'s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to twodecimal places.)$173.21$522.62O $174.21O $191.63

Praxis Corp. is expected to generate a free cash flow (FCF) of $12,975.00 million this year (FCF₁ = $12,975.00 million), and the FCF is expected to grow at a rate of 21.40% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 2.82% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Praxis Corp.’s weighted average cost of capital (WACC) is 8.46%, what is the current total firm value of Praxis Corp.? (Note: Round all intermediate calculations to two decimal places.) a. $376,289.47 million b. $388,953.45 million c. $313,574.56 million d. $40,340.86 million Praxis Corp.’s debt has a market value of $235,181 million, and Praxis Corp. has no preferred stock. If Praxis Corp. has 450 million shares of common stock outstanding, what is Praxis Corp.’s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.) a. $173.21 b. $522.62 c. $174.21 d. $191.63

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter21: Dynamic Capital Structures And Corporate Valuation

Section: Chapter Questions

Problem 9P

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Question

Praxis Corp. is expected to generate a free cash flow (FCF) of $12,975.00 million this year (FCF₁ = $12,975.00 million), and the FCF is expected to grow at a rate of 21.40% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 2.82% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Praxis Corp.’s weighted average cost of capital (WACC) is 8.46%, what is the current total firm value of Praxis Corp.? (Note: Round all intermediate calculations to two decimal places.)

a. $376,289.47 million

b. $388,953.45 million

c. $313,574.56 million

d. $40,340.86 million

Praxis Corp.’s debt has a market value of $235,181 million, and Praxis Corp. has no preferred stock. If Praxis Corp. has 450 million shares of common stock outstanding, what is Praxis Corp.’s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.)

a. $173.21

b. $522.62

c. $174.21

d. $191.63

Praxis Corp. is expected to generate a free cash flow (FCF) of $12,975.00 million this year (FCF1 = $12,975.00 million), and the FCF is expected to
grow at a rate of 21.40% over the following two years (FCF2 and FCF:). After the third year, however, the FCF is expected to grow at a constant rate
of 2.82% per year, which will last forever (FCF-). Assume the firm has no nonoperating assets. If Praxis Corp.'s weighted average cost of capital
(WACC) is 8.46%, what is the current total firm value of Praxis Corp.? (Note: Round all intermediate calculations to two decimal places.)
O $376,289.47 million
$388,953.45 million
$313,574.56 million
$40,340.86 million
Praxis Corp.'s debt has a market value of $235,181 million, and Praxis Corp. has no preferred stock. If Praxis Corp. has 450 million shares of common
stock outstanding, what is Praxis Corp.'s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two
decimal places.)
$173.21
$522.62
O $174.21
O $191.63

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