Question

Brandtly Industries invests a large sum of money in R&D; as a result, it retains and reinvests all of its earnings. In other words, Brandtly does not pay any dividends, and it has no plans to pay dividends in the near future. A major pension fund is interested in purchasing Brandtly's stock. The pension fund manager has estimated Brandtly's free cash flows for the next 4 years as follows: $3 million, $7 million, $8 million, and $15 million. After the fourth year, free cash flow is projected to grow at a constant 5%. Brandtly's WACC is 16%, the market value of its debt and preferred stock totals $44 million, the firm has $13 million in non-operating assets, and it has 20 million shares of common stock outstanding.

- What is the present value of the free cash flows projected
during the next 4 years? Do not round intermediate calculations.
Round your answer to the nearest dollar. Write out your answers
completely. For example, 13 million should be entered as
13,000,000.

$ - What is the firm's horizon, or continuing, value? Round your
answer to the nearest dollar. Write out your answers completely.
For example, 13 million should be entered as 13,000,000.

$ - What is the market value of the company's operations? Do not
round intermediate calculations. Round your answer to the nearest
dollar. Write out your answers completely. For example, 13 million
should be entered as 13,000,000.

$

What is the firm's total market value today? Do not round intermediate calculations. Round your answer to the nearest dollar. Write out your answers completely. For example, 13 million should be entered as 13,000,000.

$ - What is an estimate of Brandtly's price per share? Do not round
intermediate calculations. Round your answer to the nearest
cent.

$

Answer #1

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Brandtly Industries invests a large sum of money in R&D; as
a result, it retains and reinvests all of its earnings. In other
words, Brandtly does not pay any dividends, and it has no plans to
pay dividends in the near future. A major pension fund is
interested in purchasing Brandtly's stock. The pension fund manager
has estimated Brandtly's free cash flows for the next 4 years as
follows: $4 million, $7 million, $12 million, and $15 million.
After the...

Brandtly Industries invests a large sum of money in R&D; as
a result, it retains and reinvests all of its earnings. In other
words, Brandtly does not pay any dividends, and it has no plans to
pay dividends in the near future. A major pension fund is
interested in purchasing Brandtly's stock. The pension fund manager
has estimated Brandtly's free cash flows for the next 4 years as
follows: $4 million, $7 million, $8 million, and $14 million. After
the...

Brandtly Industries
invests a large sum of money in R&D; as a result, it retains
and reinvests all of its earnings. In other words, Brandtly does
not pay any dividends, and it has no plans to pay dividends in the
near future. A major pension fund is interested in purchasing
Brandtly's stock. The pension fund manager has estimated Brandtly's
free cash flows for the next 4 years as follows: $4 million, $5
million, $10 million, and $13 million. After the...

Brandtly Industries invests a large sum of money in R&D; as
a result, it retains and reinvests all of its earnings. In other
words, Brandtly does not pay any dividends, and it has no plans to
pay dividends in the near future. A major pension fund is
interested in purchasing Brandtly's stock. The pension fund manager
has estimated Brandtly's free cash flows for the next 4 years as
follows: $4 million, $7 million, $9 million, and $15 million. After
the...

Brandtly Industries invests a large sum of money in R&D; as
a result, it retains and reinvests all of its earnings. In other
words, Brandtly does not pay any dividends, and it has no plans to
pay dividends in the near future. A major pension fund is
interested in purchasing Brandtly's stock. The pension fund manager
has estimated Brandtly's free cash flows for the next 4 years as
follows: $4 million, $5 million, $12 million, and $14 million.
After the...

Brandtly Industries invests a large sum of money in R&D; as
a result, it retains and reinvests all of its earnings. In other
words, Brandtly does not pay any dividends, and it has no plans to
pay dividends in the near future. A major pension fund is
interested in purchasing Brandtly's stock. The pension fund manager
has estimated Brandtly's free cash flows for the next 4 years as
follows: $4 million, $7 million, $10 million, and $16 million.
After the...

Brandtly Industries invests a large sum of money in R&D; as
a result, it retains and reinvests all of its earnings. In other
words, Brandtly does not pay any dividends, and it has no plans to
pay dividends in the near future. A major pension fund is
interested in purchasing Brandtly's stock. The pension fund manager
has estimated Brandtly's free cash flows for the next 4 years as
follows: $4 million, $7 million, $11 million, and $15 million.
After the...

Brandtly Industries invests a large sum of money in R&D; as
a result, it retains and reinvests all of its earnings. In other
words, Brandtly does not pay any dividends, and it has no plans to
pay dividends in the near future. A major pension fund is
interested in purchasing Brandtly's stock. The pension fund manager
has estimated Brandtly's free cash flows for the next 4 years as
follows: $4 million, $7 million, $8 million, and $16 million. After
the...

Brandtly Industries invests a large sum of money in R&D; as
a result, it retains and reinvests all of its earnings. In other
words, Brandtly does not pay any dividends, and it has no plans to
pay dividends in the near future. A major pension fund is
interested in purchasing Brandtly's stock. The pension fund manager
has estimated Brandtly's free cash flows for the next 4 years as
follows: $3 million, $5 million, $8 million, and $15 million. After
the...

Brandtly Industries invests a large sum of money in R&D; as
a result, it retains and reinvests all of its earnings. In other
words, Brandtly does not pay any dividends, and it has no plans to
pay dividends in the near future. A major pension fund is
interested in purchasing Brandtly's stock. The pension fund manager
has estimated Brandtly's free cash flows for the next 4 years as
follows: $3 million, $7 million, $11 million, and $15 million.
After the...

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