Question

SM Town Inc. estimates their future free cash flows as followed: Year 1: $25,000; Year 2:...

SM Town Inc. estimates their future free cash flows as followed: Year 1: $25,000; Year 2: $31,600; Year 3: $34,000. They expect a 5% growth rate beyond year 3 and the required rate of return is 13%.

18) What is their terminal value in Year 3 (V3)?

$446,250

$414,750

$378,990

$425,000

19.) What is a fair stock price per share of SM Town if they have $50,000 in debt and 3,500 shares outstanding?

$89.99

$80.84

$94.20

$87.96

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
SM Town Inc. estimates their future free cash flows as followed: Year 1: $25,000; Year 2:...
SM Town Inc. estimates their future free cash flows as followed: Year 1: $25,000; Year 2: $31,600; Year 3: $34,000. They expect a 5% growth rate beyond year 3 and the required rate of return is 13%. 18) What is their terminal value in Year 3 (V3)? Question 18 options: $446,250 $378,990 $425,000 $414,750 What is a fair stock price per share of SM Town if they have $50,000 in debt and 3,500 shares outstanding? Question 19 options: $94.20 $87.96...
Assume a corporation is expecting the following cash flows in the future: $-4 million in year...
Assume a corporation is expecting the following cash flows in the future: $-4 million in year 1, $9 million in year 2, $19 million in year 3. After year 3, the cash flows are expected to grow at a rate of 5% forever. The discount rate is 8%, the firm has debt totaling $42 million, and 11 million shares outstanding. What should be the price per share for this company?
Hadley Inc. forecasts the year-end free cash flows (in millions) shown below. Year 1 2 3...
Hadley Inc. forecasts the year-end free cash flows (in millions) shown below. Year 1 2 3 4 5 FCF -$22.54 $37.9 $44 $52.6 $56.2 The weighted average cost of capital is 9%, and the FCFs are expected to continue growing at a 4% rate after Year 5. The firm has $26 million of market-value debt, but it has no preferred stock or any other outstanding claims. There are 19 million shares outstanding. What is the value of the stock price...
Quantitative Problem 2: Hadley Inc. forecasts the year-end free cash flows (in millions) shown below. Year...
Quantitative Problem 2: Hadley Inc. forecasts the year-end free cash flows (in millions) shown below. Year 1 2 3 4 5 FCF -$22.47 $37.2 $43.4 $51.3 $56.7 The weighted average cost of capital is 12%, and the FCFs are expected to continue growing at a 3% rate after Year 5. The firm has $24 million of market-value debt, but it has no preferred stock or any other outstanding claims. There are 19 million shares outstanding. What is the value of...
Quantitative Problem 2: Hadley Inc. forecasts the year-end free cash flows (in millions) shown below. Year...
Quantitative Problem 2: Hadley Inc. forecasts the year-end free cash flows (in millions) shown below. Year 1 2 3 4 5 FCF -$22.02 $38.2 $43.8 $52.5 $56.4 The weighted average cost of capital is 10%, and the FCFs are expected to continue growing at a 3% rate after Year 5. The firm has $25 million of market-value debt, but it has no preferred stock or any other outstanding claims. There are 19 million shares outstanding. Also, the firm has zero...
The free cash flows (in millions) shown below are forecast by Simmons Inc. Year: 1 2...
The free cash flows (in millions) shown below are forecast by Simmons Inc. Year: 1 2 3 Free cash flow: -$25 $50 $55 respectively. If the weighted average cost of capital is 12% and the free cash flows are expected to continue growing at the same rate after Year 3 as from Year 2 to Year 3, what is the Year 0 value of operations, in millions? The balance sheet shows $25 million of short-term investments that are unrelated to...
- Scampini Technologies is expected to generate $175 million in free cash flow next year, and...
- Scampini Technologies is expected to generate $175 million in free cash flow next year, and FCF is expected to grow at a constant rate of 5% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 15%. If Scampini has 55 million shares of stock outstanding, what is the stock's value per share? - Enterprises recently paid a dividend, D0, of $3.75. It expects to have nonconstant growth of 15% for 2 years followed by...
Hadley Inc. forecasts the year-end free cash flows (in millions) shown below. Year 1 2 3...
Hadley Inc. forecasts the year-end free cash flows (in millions) shown below. Year 1 2 3 4 5 FCF -$22.92 $38.3 $43.1 $52.1 $56.8 The weighted average cost of capital is 10%, and the FCFs are expected to continue growing at a 4% rate after Year 5. The firm has $24 million of market-value debt, but it has no preferred stock or any other outstanding claims. There are 20 million shares outstanding. What is the value of the stock price...
1.Delta Corp.'s free cash flows last year was $200 million and analysts expect the firm's cash...
1.Delta Corp.'s free cash flows last year was $200 million and analysts expect the firm's cash flows to decrease by 10% for the next two years before returning to a constant 5% growth rate. The market value of the company's debt and preferred stock is $50 million and $4 million, respectively. The company also has $3 million invested in treasury bills. Delta has 15 million common shares outstanding and investors require a 30% rate of return. Find Delta's value of...
1. Horizon Value of Free Cash Flows Current and projected free cash flows for Radell Global...
1. Horizon Value of Free Cash Flows Current and projected free cash flows for Radell Global Operations are shown below. Actual Projected 2015 2016 2017 2018 Free cash flow $611.76 $672.44 $712.49 $769.49 (millions of dollars) Growth is expected to be constant after 2017, and the weighted average cost of capital is 11.85%. What is the horizon (continuing) value at 2018 if growth from 2017 remains constant? Do not round intermediate calculations. Enter your answer in millions. For example, an...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT