Question Details

[answered] A firm has free cash flow of $500,000 on their most recent


1. ?A firm has free cash flow of $500,000 on their most recent financial statements.? The firm expects the FCF?s to grow at about 8% per year for the next three years and then decline to a more constant 2.5% from that point on.? The cost of capital for the firm is 10.50%.? The firm?s financials also revealed that the firm has marketable securities valued at $0.75 million as well as total debt of $1 million and preferred stock totaling $250,000.? The firm has total assets of $8 million.? If the firm has 400,000 shares outstanding and 500,000 shares authorized, what is the intrinsic value of common equity per share? ??
1. Value of the firm can be calculated as follows

 

Value of firm = Next year free cash flow / (Cost of capital ? growth rate)

 

= 500000 * (1+2.5%) / (10.50% ? 2.50%) = 6,406,250.00

 

Value of the...

 


Solution details:
STATUS
Answered
QUALITY
Approved
ANSWER RATING

This question was answered on: Sep 18, 2020

PRICE: $15

Solution~0001003204.zip (25.37 KB)

Buy this answer for only: $15

This attachment is locked

We have a ready expert answer for this paper which you can use for in-depth understanding, research editing or paraphrasing. You can buy it or order for a fresh, original and plagiarism-free copy from our tutoring website www.aceyourhomework.com (Deadline assured. Flexible pricing. TurnItIn Report provided)

Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
SiteLock

About this Question

STATUS

Answered

QUALITY

Approved

DATE ANSWERED

Sep 18, 2020

EXPERT

Tutor

ANSWER RATING

GET INSTANT HELP/h4>

We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.

You can also use these solutions:

  • As a reference for in-depth understanding of the subject.
  • As a source of ideas / reasoning for your own research (if properly referenced)
  • For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student.

NEW ASSIGNMENT HELP?

Order New Solution. Quick Turnaround

Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN YOUR SET DEADLINE.

Order Now