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- Kinkead Inc. forecasts that its free cash flow in the coming year, i.e., at t = 1, will be −$10 million, but its FCF at t = 2 will be $20 million. After Year 2, FCF is expected to grow at a constant rate of 4% forever. If the weighted average cost of capital is 14%, what is the firm's value of operations, in millions? a. $167 b. $158 c. $193 d. $175 e. $18Kinkead Inc. forecasts that its free cash flow in the coming year, i.e., at t = 1, will be −$10 million, but its FCF at t = 2 will be $20 million. After Year 2, FCF is expected to grow at a constant rate of 4% forever. If the weighted average cost of capital is 14%, what is the firm's value of operations, in millions?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.)
- Barnette Inc.'s free cash flows are expected to be unstable during the next few years while the company undergoes restructuring. However, FCF is expected to be $37.42 million in Year 5, i.e., FCF at t = 5 equals $37.42 million, and the FCF growth rate is expected to be constant at 4.74% beyond that point. If the weighted average cost of capital is 11%, what is the horizon value (in millions) at t = 5?Barnette Inc.'s free cash flows are expected to be unstable during the next few years while the company undergoes restructuring. However, FCF is expected to be $42 million in Year 5, i.e., FCF at t = 5 equals $47 million, and the FCF growth rate is expected to be constant at 8% beyond that point. If the weighted average cost of capital is 13.2%, what is the horizon value (in millions) at t = 5? (Round your answer to 2 decimal places.)Happy Time Inc. is expected to generate the following cash flows for the next year, as shown in the table below. Happy Time now only has one outstanding debt with a face value of $110 million to be repaid in the next year. The current market value for the debt is $67 million. The tax rate is zero. If the firm is financed by common equity and debt, what is the expected value of common equity next year? Cash flow in the next year Probability Amount Economy Boom 0.3 $110 million Normal 0.4 $101 million Recession 0.3 $61 million $26.8 million $24.7 million $0 -$18.3 million
- Ryan Enterprises forecasts the free cash flows (in millions) shown below. Assume the firm has zero non-operating assets. The weighted average cost of capital is 13.0%, and the FCFs are expected to continue growing at a 5.0% rate after Year 3. What is the firm's total corporate value (in millions)? FCF for the first three years are as follows: Year 1= -$15m; Year 2=$10m; Year 3=$55mYoung & Liu Inc.'s free cash flow during the just-ended year (t = 0) was $100 million, and FCF is expected to grow at a constant rate of 5% in the future. If the weighted average cost of capital is 15%, what is the firm's value of operations, in millions?We are predicting for the end of this fiscal year: Skunk Products' EBIT is $1000, its tax rate is 35%, depreciation is $100, capital expenditures are $200, accounts receivable increase by $100, and accounts payable decrease by $100. What is the free cash flow to the firm? The FCFF will grow at 3%, WACC is 10%. What is the value of the company's assets? FCFF1 = $
- Gupta Corporation is undergoing a restructuring, and its free cash flows are expected to vary considerably during the next few years. However, the FCF is expected to be $85.00 million in Year 5, and the FCF growth rate is expected to be a constant 6.5% beyond that point. The weighted average cost of capital is 12.0%. What is the horizon (or continuing) value (in millions) at t = 5? a. $1,646 O b. $1,234 O c. $1,432 d. $1,662 O e. $2,041Beyond Milk Co. has just invested $100 million into its business and forecasts that its free cash flow in the coming year, i.e., at t = 1, will be -$50 million, but its FCF at t = 2 will be $25 million. After Year 2, FCF is expected to grow at a constant rate of 5.75% forever. If the weighted average cost of capital is 8.75%, what proportion of the firm's present value of operations is contributed by the horizon value? Year: 0 1 2 Free cash flow: -$100 -$50 25 89.42% O 120.12% 96.67% 103.45% 83.25%Wall Inc. forecasts that it will have the free cash flows (in millions) shown below. Assume the firm has zero non-operating assets. If the weighted average cost of capital is 14% and the free cash flows are expected to continue growing at the same rate after Year 3 as from Year 2 to Year 3, what is the firm’s total corporate value, in millions? Do not round intermediate calculations.
