Please don't use Ai solution 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 paydividends 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: $3million, $6 million, $8 million, and $16 million. After the fourth year, free cash flow is projected to grow at a constant 3%. Brandtly's WACC is 9%, the market value of its debt and preferred stock totals$75 million, the firm has $15 million in non-operating assets, and it has 7.5 million GROUP WORKGROUP WORK a)-What is the present value of the free cash flows projected during the next 4 years?b)-What is the firm's horizon, or continuing, value? c)-What is the market value of the company's operations? What is the firm's total market value today? d)-What is an estimate of Brandtly's priceper share Describe the step by step using a fin calc. not just the answers and include Time Lines on each question to be able to receive a full grade.

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Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter23: Other Topics In Working Capital Management

Section: Chapter Questions

Problem 11MC

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eBook 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. F 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 $14 million. After the fourth year, free cash flow is projected to grow at a constant 8%. Brandtly's WACC is 16%, the market value of its debt and preferred stock totals $76 million, the firm has $13 million in nonoperating assets, and it has E million shares of common stock outstanding. a. 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. $ b. What is…
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Answer the following questions related to Dubois Inc. a. Dubois Inc. has $600,000 to invest. The company is trying to decide between two alternative uses of the funds. One alternative provides $80,000 at the end of each year for 12 years, and the other is to receive a single lump-sum payment of $1,900,000 at the end of the 12 years. Which alternative should Dubois select? Assume the interest rate is constant over the entire investment. b. Dubois Inc. has completed the purchase of new Dell computers. The fair value of the equipment is $824,150. The purchase agreement specifies an immediate down payment of $200,000 and semiannual payments of $76,952 beginning at the end of 6 months for 5 years. What is the interest rate, to the nearest percent, used in discounting this purchase transaction? c. Dubois Inc. loans money to John Kruk Corporation in the amount of $800,000. Dubois accepts an 8% note due in 7 years with interest payable semiannually. After 2 years (and receipt of…
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