Falcon Dynamics Inc. is a growing firm that is expected to generate $12 million in cash next year. The firm's cash flow is expected to grow at a rate of 18% per year. The firm's cost of capital is 22%. A) What is the market value of this firm? B) What is the firm's P/E ratio if it has no debt?

Falcon Dynamics Inc. is a growing firm that is expected to generate $12 million in cash next year. The firm's cash flow is expected to grow at a rate of 18% per year. The firm's cost of capital is 22%. A) What is the market value of this firm? B) What is the firm's P/E ratio if it has no debt?

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 1P: Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1...

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Question

Please provide answer the following requirements on these financial accounting question

Falcon Dynamics Inc. is a growing firm that is expected to generate $12
million in cash next year. The firm's cash flow is expected to grow at a rate
of 18% per year. The firm's cost of capital is 22%.
A) What is the market value of this firm?
B) What is the firm's P/E ratio if it has no debt?

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