You are given the following information: Stockholders' equity as reported on the firm's balance sheet = $4 billion, price/earnings ratio = 16.5, common shares outstanding = 220 million, and market/ book ratio 1.8. The firm's market value of total debt is $5 billion, the firm has cash and equivalents totaling $250 million, and the firm's EBITDA equals $3 billion. What is the price of a share of the company's common stock? Do not round intermediate calculations. Round your answer to the nearest cent. $ What is the firm's EV/EBITDA? Do not round intermediate calculations. Round your answer to two decimal places.

You are given the following information: Stockholders' equity as reported on the firm's balance sheet = $4 billion, price/earnings ratio = 16.5, common shares outstanding = 220 million, and market/ book ratio 1.8. The firm's market value of total debt is $5 billion, the firm has cash and equivalents totaling $250 million, and the firm's EBITDA equals $3 billion. What is the price of a share of the company's common stock? Do not round intermediate calculations. Round your answer to the nearest cent. $ What is the firm's EV/EBITDA? Do not round intermediate calculations. Round your answer to two decimal places.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 13P

See similar textbooks

Similar questions

Bayani Bakerys most recent FCF was 48 million; the FCF is expected to grow at a constant rate of 6%. The firms WACC is 12%, and it has 15 million shares of common stock outstanding. The firm has 30 million in short-term investments, which it plans to liquidate and distribute to common shareholders via a stock repurchase; the firm has no other nonoperating assets. It has 368 million in debt and 60 million in preferred stock. a. What is the value of operations? b. Immediately prior to the repurchase, what is the intrinsic value of equity? c. Immediately prior to the repurchase, what is the intrinsic stock price? d. How many shares will be repurchased? How many shares will remain after the repurchase? e. Immediately after the repurchase, what is the intrinsic value of equity? The intrinsic stock price?
If a “typical” firm reports $20 million of retained earnings on its balance sheet, can the firm definitely pay a $20 million cash dividend?
Suppose IWT has decided to distribute $50 million, which it presently is holding in liquid short-term investments. IWT’s value of operations is estimated to be about $1,937.5 million; it has $387.5 million in debt and zero preferred stock. As mentioned previously, IWT has 100 million shares of stock outstanding. Assume that IWT has not yet made the distribution. What is IWT’s intrinsic value of equity? What is its intrinsic stock price per share? Now suppose that IWT has just made the $50 million distribution in the form of dividends. What is IWT’s intrinsic value of equity? What is its intrinsic stock price per share? Suppose instead that IWT has just made the $50 million distribution in the form of a stock repurchase. Now what is IWT’s intrinsic value of equity? How many shares did IWT repurchase? How many shares remained outstanding after the repurchase? What is its intrinsic stock price per share after the repurchase?
Rebert Inc. showed the following balances for last year: Reberts net income for last year was 3,182,000. Refer to the information for Rebert Inc. above. Also, assume that the market price per share for Rebert is 51.50. Required: 1. Compute the dollar amount of preferred dividends. 2. Compute the number of common shares. 3. Compute earnings per share. (Note: Round to two decimals.) 4. Compute the price-earnings ratio. (Note: Round to the nearest whole number.)
Based on the corporate valuation model, the value of Chen Lin Inc.'s operations is $ 897 million. Its balance sheet shows $ 103 million in notes payable, $ 99 million in long-term debt, $ 15 million in preferred stock, $140 million in retained earnings, and $280 million in total common equity. If the company has 27 million shares of stock outstanding, what is the best estimate of its stock price per share?
You are given the following information: Stockholders’equity as reported on the firm’s balance sheet = $6.5 billion, price-earnings ratio = 9, commonshares outstanding = 180 million, and market/book ratio = 2.0. The firm’s marketvalue of total debt is $7 billion, the firm has cash and equivalents totaling $250 million, andthe firm’s EBITDA equals $2 billion. What is the price of a share of the company’s commonstock? What is the firm’s EV/EBITDA?
You are given the following information: Stockholders’ equity as reported on the firm’s balance sheet 5 $6.5 billion, price ∕ earnings ratio 5 9, com- mon shares outstanding 5 180 million, and market/book ratio 5 2.0. The firm’s market value of total debt is $7 billion, the firm has cash and equivalents totaling $250 million, and the firm’s EBITDA equals $2 billion. What is the price per share? what is firm EV/EBITDA ?
Edelman Engines has $18 billion in total assets of which cash and equivalents total $80 million. Its balance sheet shows $1.8 billion in current liabilities of which the notes payable balance totals $1.05 billion. The firm also has $9.9 billion in long-term debt and $6.3 billion in common equity. It has 300 million shares of common stock outstanding, and its stock price is $26 per share. The firm's EBITDA totals $1.17 billion. Assume the firm's debt is priced at par, so the market value of its debt equals its book value. What are Edelman's market/book and its EV/EBITDA ratios?