. Valuing a business (S4.6) Phoenix Corp. faltered during the Covid pandemic but is recovering. Free cash flow has grown rapidly. Forecasts made in 2021 are as follows: ($ millions) Net income Investment Free cash flow 2022 1.0 1.0 0 2023 2.0 1.0 1.0 2024 3.2 1.2 2.0 2025 3.7 1.4 2.3 Phoenix's recovery will be complete by 2026, and there will be no further growth in net income or free cash flow. a. Calculate the PV of free cash flow, assuming a cost of equity of 9%. b. Assume that Phoenix has 12 million shares outstanding. What is the price per share? 2026 4.0 1.4 2.6

. Valuing a business (S4.6) Phoenix Corp. faltered during the Covid pandemic but is recovering. Free cash flow has grown rapidly. Forecasts made in 2021 are as follows: ($ millions) Net income Investment Free cash flow 2022 1.0 1.0 0 2023 2.0 1.0 1.0 2024 3.2 1.2 2.0 2025 3.7 1.4 2.3 Phoenix's recovery will be complete by 2026, and there will be no further growth in net income or free cash flow. a. Calculate the PV of free cash flow, assuming a cost of equity of 9%. b. Assume that Phoenix has 12 million shares outstanding. What is the price per share? 2026 4.0 1.4 2.6

Name: 29. Valuing a business (S4.6) Phoenix Corp. faltered during the Covid
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Description: 29. Valuing a business (S4.6) Phoenix Corp. faltered during the Covid pandemic but is recovering. Free cash flow has grownrapidly. Forecasts made in 2021 are as follows:($ millions)Net incomeInvestmentFree cash flow20221.01.0020232.01.01.020243.21.2

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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For the given cash flow, Which of the following statements is correct? Year 1 3 +2,000 -500 -8,100 +6,800 Select one: a. There are two interest rate b. The present worth converts in sign from positive to negative two times C. Non-conventional cash flow d. all the above %24
Kale Inc. forecasts the free cash flows (in millions) shown below. Assume the firm has zero non-operating assets. If the weighted average cost of capital is 11.0% and FCF is expected to grow at a rate of 5.0% after Year 2, then what is the firm’s total corporate value (in millions)? Do not round intermediate calculations. Year 1 2 Free Cash flow -$30 $195 a. $3,413 million b. $2,901 million c. $3,044 million d. $2,743 million e. $2,643 million
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Please help me answer this. Thank you.
Google Calendar Use the following table and information to answer questions 26 and 27 The following table presents forecasted financial and other information for XTD Corporation. The table shows end of year numbers (in millions). XTD's WACC is 8%. Year 1 Year 2 Year 3 Net income $65 $72 $80 Free cash flow $40 $45 $50 26) What is an appropriate estimate of XTD's terminal value as of today, using warranted price-to-earnings of 12.0 at year 3? $ 1,036.8 million $ 895.2 million $ 762.1 million O $ 888.8 million
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Given: Cash transactions as shown in cash flow diagram. %24 g = 4%/yr (positive transactions decreases from year to year) i = 10% per year 1 3 4. 5 7 12 13 14 15 Yrs g = 5%/yr (negative transactions become more negative) Required: (i) The net equivalent value at year 0 (Po)
Quantitative Problem 2: Hadley Inc. forecasts the year-end free cash flows (in millions) shown below. Year 1 2 3 4 5 FCF -$22.39 $38.8 $44 $52.8 $56.5 The weighted average cost of capital is 9%, and the FCFs are expected to continue growing at a 3% rate after Year 5. The firm has $24 million of market-value debt, but it has no preferred stock or any other outstanding claims. There are 20 million shares outstanding. What is the value of the stock price today (Year 0)? Round your answer to the nearest cent. Do not round intermediate calculations.$ per share
Is the company growing? Explain. Be sure to include the percentages you got Millions of US $ $-94 $-38 $-36 $52 $-28 $-33 $-28 Annual Net Income 2022 2021 2020 2019 2018 2017 2016 To calculate growth versus prior years, use this formula: (this year's number minus last year's number)/Last year's number). This will give you the percentage change from the previous year. • • From 2016 to 2017: ((-$33 million)-(-$28 million))/(-$28 million)) *100= 17.86% • From 2017 to 2018: ((-$28 million)-(-$33 million))/(-$33 million) *100= -15.15% From 2018 to 2019: (($52 million)-(-$28 million))/(-$28 million) *100= -285.71% From 2019 to 2020: ((-$36 million)-($52 million))/ ($52 million) *100= -169.23% ● From 2020 to 2021: ((-$38 million)-(-$36 million))/(-$36 million) *100= 5.56% From 2021 to 2022: ((-$94 million)-(-$38 million)/(-$38 million) *100= 147.36% • ●
Quantitative Problem 2: Hadley Inc. forecasts the year-end free cash flows (in millions) shown below. Year 1 2 3 4 5 FCF -$22.37 $38.7 $43.6 $51.8 $57 The weighted average cost of capital is 12%, and the FCFs are expected to continue growing at a 5% 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 20 million shares outstanding. What is the value of the stock price today (Year 0)? Do not round intermediate calculations. Round your answer to the nearest cent. per share According to the valuation models developed in this chapter, the value that an investor assigns to a share of stock is dependent on the length of time the investor plans to hold the stock. The statement above is false $
analyze cash flow and compute for the unknown value. show complete solution, thank you.

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