A company’s most recent free cash flow to equity was $100 and is expectedto grow at 5% thereafter. The company’s cost of equity is 10%. Its WACC is8.72%. What is its current intrinsic value?
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A company’s most recent
to grow at 5% thereafter. The company’s
8.72%. What is its current intrinsic value?
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- Suppose the growth rate of a firm's profits is 5%, the interest rate is 6%, and the current profits of the firm are $100 million dollars. What is the value of the firm?ACME Inc. has the following ratios: A0/S0- 1.3; LO/SO-0.40; profit margin-0.14; and the dividend payout ratio- .32, or 32%. Sales last year were $85 million. Assuming that these ratios will remain constant, use the AFN equation to determine the firm's self-supporting growth rate-in other words, the maximum growth rate ACME can achieve without having to employ non-spontaneous external funds. (Equation 9-2, which is 9-1, solving for g)Hart Enterprises recently paid a dividend D∘ = $1.25. It expects to have non constant growth of 20% for 2 years followed by a constant rate of 5% thereafter. The firm’s required return is 10%. What is the firm’s intrinsic value today, ˆP0?