Zhdanov Inc Forecasts That Its Free Cash Flow In The Coming Year I E At T 1 Will Be 10 Million But Its Fcf At T 2 Will Be 20 Million After Year 2 Fcf Is Expected To Grow At A Constant R Essays and Term Papers
average cost of capital is 11%, what is the value of its operations?
a. | $1,714,750 |
b. | $1,805,000 |
c. | $1,900,000 |
d. | $2,000,000 |
e. | $2,100,000 |
____ 17. ZhdanovInc. forecasts that its freecashflow in the comingyear, i.e., at t = 1, will be –$10million, but its FCF...
:
Increasing the expected growth rate of sales.
• Question 9
7.692 out of 7.692 points
ZhdanovInc. forecasts that its freecashflow in the comingyear, i.e., at t = 1, will be $10million, but its FCF at t = 2 will be $20million. AfterYear2, FCF is expected to grow at a constant...
Answer:
Increasing the expected growth rate of sales.
• Question 17
2 out of 2 points
Simonyan Inc. forecasts a freecashflow of $40 million in Year 3, i.e., at t = 3, and it expects FCF to grow at a constant rate of 5% thereafter. If the weighted average cost of capital is 10...
) |
| = $100(1 + 0.05) / (0.15 – 0.05) = $105 / 0.1 = $1,050 |
| |
Correct
Marks for this submission: 1/1.
Question 8
Marks: 1ZhdanovInc. forecasts that its freecashflow in the comingyear, i.e., at t = 1, will be –$10million, but its FCF at t = 2 will be $20million. AfterYear2...
%, what is the value of its operations?
a.
$1,714,750
b.
$1,805,000
c.
$1,900,000
d.
$2,000,000
e.
$2,100,000
__B__ 17. ZhdanovInc. forecasts that its freecashflow in the comingyear, i.e., at t = 1, will be –$10million, but its FCF at t = 2 will be $20million. AfterYear2, FCF...
to Maturity=7.51%
Cost of equity=4.5 + (5.5)X 1.2=11.1%
WACC=.35x4.5+.65x11.1=8.79%
4. (TCO B) Leak Inc. forecasts the freecashflows (in millions) shown below. If the weighted average cost of capital is 11% and FCF is expected to grow at a rate of 5% afterYear2, what is the Year 0 value of...
1 $3,000
2 4,000
3 5,000
The analyst estimates that after three years (t = 3) the company’s freecashflow will grow at a constant rate of 6 percent per year. The analyst estimates that the company’s weighted...
feasibly grow forever once it has stabilized (after10years). The value of the terminal yearcashflows (that is, the value in year10) is given by: FCF10 (1 + g) (rd - g)
TY FCF
The present value of the terminal yearcashflows (that is, the value today) is given by: TY FCF (1 + rd)
10
PV (TY...
)
87
FCF and PV
Example
Given the cashflows for Concatenator Manufacturing Division, calculate the PV of near term cashflows, PV (horizon value), and the total value of the firm. r=10% and g= 6%
Year
AssetValue Earnings Investment Free CashFlow
12 3 4 5 6 10.00 12.00 14.40 17.28...
a stock with EPS in the coming three years of €2 and then to grow at a constant rate forever. The company has to keep a target price-to-earnings ratio of 10 and a payout ratio of 30% afteryear 3. The stock beta is 1.2 and the market risk premium is 6%? P P⁄ P⁄ rg (r) P ⇔g r P P rg P We have a 3...
) ⎟ ⎜ (1.14 ) ⎟ 0.14 ⎜ (1.14 )10 ⎝ ⎠ ⎝ ⎠ ⎝ = −$64.816
200,000 ⎛ 1 ⎜1 − ⎜ (1+r )6 r ⎝
⎞ ⎟ ⎟ ⎠
6-7.
OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship would cost $500 million, and would operate for 20years. OpenSeas expects annual cashflows from operating the ship to...
repaid the loan at the end of one year, what was the total dollar annual
cost of the revolver?
a. $612,750
b. $645,000
c. $677,250
d. $711,113
e. $746,668
(Comp.) Working capital, FCF C S Answer: b HARD
102. Madura Inc. wants to increase its freecashflow by $180 million during
the coming...
the expectedFCFs at the WACC (10%) and assumed a constant growth of 2% after 2008. The valuation provided lines 1 to 7, and stated that the WACC was
1
The (D/E) ratios must be calculated using the values obtained in the valuation.
6
80 common and uncommon errors in company valuation...
rate of 6.5%, what is the future value of the following cashflow stream?
Years: 0 12 3 4
| | | | |
CFs: $0 $75 $225 $0 $300
a. $526.01
b. $553.69
c. $582.83
d. $613.51
e. $645.80
EE
Your father paid $10,000 (CF at t = 0) for an investment that promises to pay $750 at the end of...
expected to grow 15.1% annually, while the EMEA region is expected to grow 9.9 annually.
10
Google, Inc.
Exhibit 11: International Online Advertising Spend
US$ in millions, unless otherwise stated
28 September 2004
$8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 1999 2000 2001...
difficulties. They estimate below their future
freecashflows to the firm (FCFF) over the next 5 years. The figures are in £ millions.
Year N+1
FCFF -20
N+210
N+3
15
N+4
18
N+5
20
The target Debt to Equity ratio is 3 and the market value of the current financial debt is 300...
projections to estimate the DCF value of Digital Everywhere. Assume that the terminal growth rate of 5%. Make sure that you show your FreeCashFlow for each year clearly. (I have posted an Excel file that has the exhibits from the case) 2. Based on Exhibit 2 estimate the Unlevered Beta (some time...
is a variant of the UEC’s method when the number of years tends towards infinity. In the case of the company Alfa Inc., B = 26; A = 135, i = 10%. With these assumptions, if t = 15%, the equity’s value would be 185 million dollars.
5. Cashflow discounting-based methods These methods seek to...