The following is a four-year forecast for Torino Marine. Year 2022 2023 2024 2025 Free cash flow ($ millions) −52 73 90 112 Estimate the fair market value of Torino Marine at the end of 2021. Assume that after 2025, earnings before interest and tax will remain constant at $200 million, depreciation will equal capital expenditures in each year, and working capital will not change. Torino Marine’s weighted-average cost of capital is 10 percent and its tax rate is 30 percent. Note: Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place. Estimate the fair market value per share of Torino Marine’s equity at the end of 2021 if the company has 37 million shares outstanding and the market value of its interest-bearing liabilities on the valuation date equals $270 million. Note: Do not round intermediate calculations. Round your answer to 2 decimal place
The following is a four-year forecast for Torino Marine. Year 2022 2023 2024 2025 Free cash flow ($ millions) −52 73 90 112 Estimate the fair market value of Torino Marine at the end of 2021. Assume that after 2025, earnings before interest and tax will remain constant at $200 million, depreciation will equal capital expenditures in each year, and working capital will not change. Torino Marine’s weighted-average cost of capital is 10 percent and its tax rate is 30 percent. Note: Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place. Estimate the fair market value per share of Torino Marine’s equity at the end of 2021 if the company has 37 million shares outstanding and the market value of its interest-bearing liabilities on the valuation date equals $270 million. Note: Do not round intermediate calculations. Round your answer to 2 decimal place
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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Question
The following is a four-year
| Year | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| −52 | 73 | 90 | 112 |
- Estimate the fair market value of Torino Marine at the end of 2021. Assume that after 2025, earnings before interest and tax will remain constant at $200 million,
depreciation will equal capital expenditures in each year, and working capital will not change. Torino Marine’s weighted-average cost of capital is 10 percent and its tax rate is 30 percent.Note: Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place.
- Estimate the fair market value per share of Torino Marine’s equity at the end of 2021 if the company has 37 million shares outstanding and the market value of its interest-bearing liabilities on the valuation date equals $270 million.
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
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