Dantzler Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 5% rate. Dantzler's WACC is 13%. Year 0 1 2 3 ....... ....... ....... ....... ....... ....... ....... ....... FCF ($ millions) ....... ....... ....... ....... ....... ....... ....... ...... - $9 $19 $49 The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet What is Dantzler's horizon, or continuing, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. $ fill in the blank 2 million What is the firm's value today? Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round your intermediate calculations. $ fill in the blank 3 million Suppose Dantzler has $117 million of debt and 12 million shares of stock outstanding. What is your estimate of the current price per share? Round your answer to two decimal places. Write out your answer completely. For example, 0.00025 million should be entered as 250. $ fill in the blank 4
Dantzler Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 5% rate. Dantzler's WACC is 13%. Year 0 1 2 3 ....... ....... ....... ....... ....... ....... ....... ....... FCF ($ millions) ....... ....... ....... ....... ....... ....... ....... ...... - $9 $19 $49 The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet What is Dantzler's horizon, or continuing, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. $ fill in the blank 2 million What is the firm's value today? Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round your intermediate calculations. $ fill in the blank 3 million Suppose Dantzler has $117 million of debt and 12 million shares of stock outstanding. What is your estimate of the current price per share? Round your answer to two decimal places. Write out your answer completely. For example, 0.00025 million should be entered as 250. $ fill in the blank 4
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
Related questions
Question
Dantzler Corporation is a fast-growing supplier of office products. Analysts project the following
| Year | 0 | 1 | 2 | 3 | ||||
| ....... | ....... | ....... | ....... | ....... | ....... | ....... | ....... | |
| FCF ($ millions) | ....... | ....... | ....... | ....... | ....... | ....... | ....... | ...... |
| - $9 | $19 | $49 |
The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.
-
What is Dantzler's horizon, or continuing, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55.
$ fill in the blank 2 million
-
What is the firm's value today? Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round your intermediate calculations.
$ fill in the blank 3 million
-
Suppose Dantzler has $117 million of debt and 12 million shares of stock outstanding. What is your estimate of the current price per share? Round your answer to two decimal places. Write out your answer completely. For example, 0.00025 million should be entered as 250.
$ fill in the blank 4
Transcribed Image Text:File
123
5
G7
<>
Assignments - you...
template - Saved ✓
Home Insert
A
Corporate valuation
4 FCF1
5
FCF2
FCF3
Arial
Dollars/shares in millions
6
7 Constant growth rate, gn
WACC
Market value of debt
Formulas
8
9
10 Common shares outstanding
11
12
13 FCFS
14 Horizon value
15 Total FCFs
16
17 PV of FCFs to investors
18
19 Firm value today
20
21 Market value of equity, MV Equity
22 Price per share, Po
23
24
25
26 FCFS
27 Horizon value
28 Total FCFs
29
30 PV of FCFs to investors
31
32 Firm value today
33
<
Draw
Workbook Statistics
fx
Sheet1 +
Mind Tap - Cengage...
Page Layout
V
B
10
-$9.00
$19.00
$49.00
5.00%
13.00%
$117.00
12
0
0
#N/A
C
Mind Tap - Cengage...
Formulas
B
1
-$9.00
1
-$9.00
#N/A
#N/A
Data
D
Review
V
Search for tools, help, and more (Option + Q)
2
$19.00
2
$19.00
#N/A
View
#N/A
Excel Online Studen...
E
Help
ng.cengage.com
ab
→
General
3
$49.00
3
$49.00
#N/A
#N/A
#N/A
Excel Online Studen...
F
4
4
#N/A
V
←0
.00
.00
→.0
H
Excel Online Studen...
J
ST
NTT
b Success Confirmati...
K
Σ✓ APV
M
Editing ✓
C https://www.chegg....
N
Give Feedback to Microsoft
+
Comments
O
T
P
100% +
Transcribed Image Text:File
5
F47
<>
Assignments - you...
template - Saved ✓
Home Insert
14 TYDSUIT YSTE
15 Total FCFs
A
Arial
16
17 PV of FCFs to investors
Formulas
Draw
18
19 Firm value today
20
21 Market value of equity, MV Equity
22 Price per share, Po
23
24
25
26 FCFS
27 Horizon value
28 Total FCFs
29
30 PV of FCFs to investors
31
32 Firm value today
33
34 Market value of equity, MV Equity
35 Price per share, Po
36
37
38
39
40
41
42
43
44
45
46
47
<
Workbook Statistics
fx
Sheet1 +
MindTap - Cengage...
Page Layout
V
B
10
0
#N/A
#N/A
#N/A
C
Mind Tap - Cengage...
Formulas
B
1
-$9.00
#N/A
#N/A
Data
D
Review
V
Search for tools, help, and more (Option + Q)
2
$19.00
#N/A
#N/A
Excel Online Studen...
View
E
Help
ng.cengage.com
ab
→
General
3
$49.00
#N/A
#N/A
#N/A
Excel Online Studen...
F
4
#N/A
G
v
←0
.00
.00
→.0
H
Excel Online Studen...
J
ST
NT
b Success Confirmati...
K
Σ✓ ATV
M
Editing ✓
C https://www.chegg....
N
Give Feedback to Microsoft
+
Comments
O
T
P
100% +
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education