4 net capital expenditures of $1,140 million, and net operating working capital (NOWC) is expected to increase by $10 million. How much free cash flow(FCF) is Blur Corp. expected to generate over the next year?O $118,668 millionO $6,470 millionO $6,450 millionO $8,730 millionBlur Corp.'s FCFS are expected to grow at a constant rate of 4.62% per year in the future. The market value of Blur Corp.'s outstanding debt is$31,412 million, and its preferred stocks' value is $17,451 million. Blur Corp. has 150 million shares of common stock outstanding, and its weightedaverage cost of capital (WACC) equals 13.86%.TermTotal firm valueIntrinsic value of common equityIntrinsic value per shareValue (Millions)Using the preceding information and the FCF you calculated in the previous question, calculate the appropriate values in this table. Assume the firmhas no nonoperating assets. The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value added (EVA) approach are someexamples of valuation techniques. The corporate valuation model is similar to the dividend-based valuation that you've done in previousproblems, but it focuses on a firm's free cash flows (FCFS) instead of its dividends. Some firms don't pay dividends, or their dividendsare difficult to forecast. For that reason, some analysts use the corporate valuation model.Blur Corp. has an expected net operating profit after taxes, EBIT(1-T), of $7,600 million in the coming year. In addition, the firm is expected to havenet capital expenditures of $1,140 million, and net operating working capital (NOWC) is expected to increase by $10 million. How much free cash flow(FCF) is Blur Corp. expected to generate over the next year?O $118,668 millionO $6,470 millionO $6,450 millionO $8,730 million

Data given: Net operating profit after taxes [EBIT(1-T)]= $7600 million Net capital…

The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value added (EVA) approach are some examples of valuation techniques. The corporate valuation model is similar to the dividend-based valuation that you've done in previous problems, but it focuses on a firm's free cash flows (FCFS) instead of its dividends. Some firms don't pay dividends, or their dividends are difficult to forecast. For that reason, some analysts use the corporate valuation model. Blur Corp. has an expected net operating profit after taxes, EBIT(1-T), of $7,600 million in the coming year. In addition, the firm is expected to have net capital expenditures of $1,140 million, and net operating working capital (NOWC) is expected to increase by $10 million. How much free cash flow (FCF) is Blur Corp. expected to generate over the next year? O $118,668 million O $6,470 million O $6,450 million O $8,730 million

The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value added (EVA) approach are some examples of valuation techniques. The corporate valuation model is similar to the dividend-based valuation that you've done in previous problems, but it focuses on a firm's free cash flows (FCFS) instead of its dividends. Some firms don't pay dividends, or their dividends are difficult to forecast. For that reason, some analysts use the corporate valuation model. Blur Corp. has an expected net operating profit after taxes, EBIT(1-T), of $7,600 million in the coming year. In addition, the firm is expected to have net capital expenditures of $1,140 million, and net operating working capital (NOWC) is expected to increase by $10 million. How much free cash flow (FCF) is Blur Corp. expected to generate over the next year? O $118,668 million O $6,470 million O $6,450 million O $8,730 million

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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