Base Hardware forecasted the following free cash flows for the next four year. If the cash flows are expected to grow by 3% a year and the discount rate is 8%, calculate its price per share today. Assume $150 million of debt and 1 million shares outstanding. 1 2 3 4 Free cash flow 500,000 1,450,000 2,130,000 2,750,000 $46.91 $39.12 $51.44 $68.70

Base Hardware forecasted the following free cash flows for the next four year. If the cash flows are expected to grow by 3% a year and the discount rate is 8%, calculate its price per share today. Assume $150 million of debt and 1 million shares outstanding. 1 2 3 4 Free cash flow 500,000 1,450,000 2,130,000 2,750,000 $46.91 $39.12 $51.44 $68.70

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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A company currently pays a dividend of $3.8 per share (D0 = $3.8). It is estimated that the company's dividend will grow at a rate of 25% per year for the next 2 years, and then at a constant rate of 6% thereafter. The company's stock has a beta of 1.4, the risk-free rate is 9.5%, and the market risk premium is 4.5%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent.
Kosm Inc. forecasts a positive Free Cash Flow for the coming year, with FCF1 = $10,000,000, and it expects a growth rate of 30% for the next two years. After Year 3, FCF is expected to grow at a constant rate of 4% forever. The Weighted Average Cost of Capital (WACC) is 11%, and the company has $65,000,000 of long-term debt (the remainder is comprised of common equity) and 10.0 million shares of common stock outstanding. What is the firm's estimated intrinsic value per share of common stock?
Find the value of X so that the present value of the following cash flow is equal to $70,000. Consider an interest rate of 10% per year. End of year 1 2 3 4 5 6 7 8 9 10 Cash flow 3,000 4,000 6,000 10,000 X 14,000 16,000 18,000 20,000 22,000
Integrated Potatoes Chips just paid a $1 per share dividend. You can expect to grow steadily at rate of 4% per year. What is the expected dividend in each of the next three years? Year 1 = 1.04 Year 2 = 1.08 Year 3 = 1.12 2. If the discount rate is 12%, at what price will the stock sale? = 13.00 3. What is the expected stock price 3 years from now? 14.02 ANSWER 4 & 5 4. If you buy stock and plan to sell it 3 years from now, what are your expected cash flows in years 1,2, & 3? 5. What is the present value of the stream of payment you found in part “D”, compare with part “B”?
Do fast A small scale mining investment is expected to generate $60,000 per year in profits over the next 15 years. If these profits are invested in a mutual fund account that ears a market interest rate of 10% per year, calculate how much the fund will be worth after the 15 years in actual dollars and in real dollars Inflation is expected to average 6% per year over that period. In real dollarA. $3,256,990B. $1,906,350C. $795,450D. $1,181,400 In actual dollarsA. $3,256,990B. $795,450C. $1,506,350D. $1,181,400 please dont provide image based answer thanku
A company currently pays a dividend of $2.2 per share (D0 = $2.2). It is estimated that the company's dividend will grow at a rate of 25% per year for the next 2 years, and then at a constant rate of 5% thereafter. The company's stock has a beta of 1.1, the risk-free rate is 9.5%, and the market risk premium is 6.5%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent.
What is the WACC for a company with the following information: Equity Information: 50 million shares, $80 per share, Beta = 1.15, Market risk premium =9%, Risk-free rate = 5%. Debt Information: 1 million outstanding bonds with a face value of $1,000 each. Current Price = $1,100, Coupon rate = 9%, semiannual coupons, 15 years to maturity Tax rate = 20%
Kinkead Inc. forecasts that its free cash flow in the coming year, i.e., at t = 1, will be -$18 million, but its FCF at t = 2 will be $40 million. After Year 2, FCF is expected to grow at a constant rate of 5% forever. If the weighted average cost of capital is 14%, what is the firm's value of operations, in millions? Year: 1 2 Free cash flow: ($18) $40 (Round your answer to 2 decimal places.)
5. An analyst estimates that XYZ's earnings will grow from $13.00 a share to $18.84 per share over the next eight years. The rate of growth in XYZ's earnings is closest to: A. 4.75%. B. 4.82%. C. 4.92%. 6. If $15,000 is invested in a fund offering an APR of 20% quarterly compounded, approximately how many years will it take for the investment to reach $71,800? A. 8 years. B. 10 years. C. 11 years. Please provide an accurate answer.
Suppose you have come up with the following dividend forecasts for the next three years. After the third year, the dividend will grow at a constant rate of 10% per year and the interest rate is 15% year expected dividend 1 $1 2 $2 3 $4 Calculate the dividends in year 4 (D4) calcu;ate the price in year 3

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