Question

Atchley Corporation’s last free cash flow was $1.55 million. The free cash flow growth rate is...

Atchley Corporation’s last free cash flow was $1.55 million. The free cash flow growth rate is expected to be constant at 1.5% for 2 years, after which free cash flows are expected to grow at a rate of 8.0% forever. The firm's weighted average cost of capital (WACC) is 12.0%. Atchley has $2 million in short-term debt and $14 million in debt and 1 million shares outstanding. What is the best estimate of the intrinsic stock price?

a. $29.70 b. $25.05 c. $26.16 d. $28.48 e. $27.30

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
1. PA Film Corporation’s last free cash flow was $1.55 million. The free cash flow growth...
1. PA Film Corporation’s last free cash flow was $1.55 million. The free cash flow growth rate is expected to be constant at 1.5% for 2 years, after which free cash flows are expected to grow at a rate of 8.0% forever. The firm's weighted average cost of capital (WACC) is 12.0%. It has $2 million in short-term debt and $14 million in debt and 1 million shares outstanding. What is the best estimate of the intrinsic stock price? a....
Ackert Company's last dividend was $1.55. The dividend growth rate is expected to be constant at...
Ackert Company's last dividend was $1.55. The dividend growth rate is expected to be constant at 1.5% for 2 years, after which dividends are expected to grow at a rate of 8.0% forever. The firm's required return (rs) is 12.0%. What is the best estimate of the current stock price?
. The last dividend paid by Wilden Corporation was $1.55. The dividend growth rate is expected...
. The last dividend paid by Wilden Corporation was $1.55. The dividend growth rate is expected to be constant at 1.5% for 2 years, after which dividends are expected to grow at a rate of 8.0% forever. The firm's required return (rs) is 12.0%. What is the best estimate of the current stock price? Answer: 37.05
Beishan Technologies' end-of-year free cash flow (FCF1) is expected to be $70 million, and free cash...
Beishan Technologies' end-of-year free cash flow (FCF1) is expected to be $70 million, and free cash flow is expected to grow at a constant growth rate of 5% a year in the future. The firm's WACC is 10%, and it has $600 million of long-term debt and preferred stock. If the firm has 34 million shares of common stock outstanding, what is the estimated intrinsic value per share of their common stock? Your answer should be between 14.20 and 68.54
Suppose Glead corporation’s projected free cash flow for next year is FCF1 = $150 million and...
Suppose Glead corporation’s projected free cash flow for next year is FCF1 = $150 million and FCF is expected to grow at a constant rate of 7.25%. If the company’s weighted average cost of capital is 10.5%, the value of debt is currently $200 million and the outstanding number of common stocks is 80 million, and there is no preferred stocks issued. Compute the value of this stock.
A company is expected to have free cash flows of $1.75 million next year. The weighted...
A company is expected to have free cash flows of $1.75 million next year. The weighted average cost of capital is WACC= 12% and the expected constant growth rate is g=6%. The company has $1.5 million in short-term investments, $2 million in debt, and 1.5 million shares. What is the stock’s current intrinsic stock price?
The MoMi Corporation’s cash flow from operations before interest, depreciation and taxes was $1.5 million in...
The MoMi Corporation’s cash flow from operations before interest, depreciation and taxes was $1.5 million in the year just ended, and it expects that this will grow by 5% per year forever. To make this happen, the firm will have to invest an amount equal to 15% of pretax cash flow each year. The tax rate is 21%. Depreciation was $210,000 in the year just ended and is expected to grow at the same rate as the operating cash flow....
he MoMi Corporation’s cash flow from operations before interest and taxes was $1.8 million in the...
he MoMi Corporation’s cash flow from operations before interest and taxes was $1.8 million in the year just ended, and it expects that this will grow by 5% per year forever. To make this happen, the firm will have to invest an amount equal to 18% of pretax cash flow each year. The tax rate is 21%. Depreciation was $240,000 in the year just ended and is expected to grow at the same rate as the operating cash flow. The...
You have been assigned the task of using the corporate, or free cash flow, model to...
You have been assigned the task of using the corporate, or free cash flow, model to estimate Petry Corporation's intrinsic value. The firm's WACC is 10.00%, its end-of-year free cash flow (FCF1) is expected to be $70.0 million, the FCFs are expected to grow at a constant rate of 5.00% a year in the future, the company has $200 million of long-term debt and preferred stock, and it has 30 million shares of common stock outstanding. What is the firm's...
Praxis Corp. is expected to generate a free cash flow (FCF) of $7,890.00 million this year...
Praxis Corp. is expected to generate a free cash flow (FCF) of $7,890.00 million this year ( FCF1 = $7,890.00 million), and the FCF is expected to grow at a rate of 20.20% over the following two years ( FCF2 and FCF3 ). After the third year, however, the FCF is expected to grow at a constant rate of 2.46% per year, which will last forever ( FCF4 ). If Praxis Corp.’s weighted average cost of capital (WACC) is 7.38%,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT