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UBTECH Robotics is expected to generate the following free cash flows over the next fiveyears. After which, the free cash flows are expected to grow at the industry average of 3% peryear. Using the discounted free cash flow model and the weighted average cost of capital of11%UBTECH Robotics FCF Forecast ($ Millions)Year                                1999 2000 2001 2002 2003 2004FCF (Amount in Millions)$55   $45   $89  $102   $84  $87a. Estimate the enterprise value (V0) of UBTECH Robotics.b. If UBTECH Robotics has excess cash of $5.6 Billion, a debt of $800 Million and 50 Millionshares outstanding, estimate its share price (P0).

UBTECH Robotics is expected to generate the following free cash flows over the next fiveyears. After which, the free cash flows are expected to grow at the industry average of 3% peryear. Using the discounted free cash flow model and the weighted average cost of capital of11%UBTECH Robotics FCF Forecast ($ Millions)Year                                1999 2000 2001 2002 2003 2004FCF (Amount in Millions)$55   $45   $89  $102   $84  $87a. Estimate the enterprise value (V0) of UBTECH Robotics.b. If UBTECH Robotics has excess cash of $5.6 Billion, a debt of $800 Million and 50 Millionshares outstanding, estimate its share price (P0).

Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter26: Capital Investment Analysis
Section: Chapter Questions
Problem 3CMA
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UBTECH Robotics is expected to generate the following free cash flows over the next five
years. After which, the free cash flows are expected to grow at the industry average of 3% per
year. Using the discounted free cash flow model and the weighted average cost of capital of
11%
UBTECH Robotics FCF Forecast ($ Millions)
Year                                1999 2000 2001 2002 2003 2004
FCF (Amount in Millions)$55   $45   $89  $102   $84  $87
a. Estimate the enterprise value (V0) of UBTECH Robotics.
b. If UBTECH Robotics has excess cash of $5.6 Billion, a debt of $800 Million and 50 Million
shares outstanding, estimate its share price (P0).

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