Year Revenue Fixed costs Variable costs Add. investment in NWC Add. investment in operating long-term assets Depreciation Interest expenses Newly issued debt Principle repayments Market value of the firm: Short-term debt Long-term debt Common stock Total Cost of equity (Rs) Tax rate 0 Select one: O a. 16.39 O b. 12.45 O c. 10.98 Price per share No. of shares Market value 200.00 600.00 18.00 0.1400 1 630.00 120.00 200.00 10.00 70.00 60.00 35.00 25.00 15.00 0.40 100 1,800.00 2,600.00 Growth rate per year from year 1 through year 5 0.12 Growth rate after year 5 0.05 Based on the equity free cash flow model, what is the price per share for the common stock
Year Revenue Fixed costs Variable costs Add. investment in NWC Add. investment in operating long-term assets Depreciation Interest expenses Newly issued debt Principle repayments Market value of the firm: Short-term debt Long-term debt Common stock Total Cost of equity (Rs) Tax rate 0 Select one: O a. 16.39 O b. 12.45 O c. 10.98 Price per share No. of shares Market value 200.00 600.00 18.00 0.1400 1 630.00 120.00 200.00 10.00 70.00 60.00 35.00 25.00 15.00 0.40 100 1,800.00 2,600.00 Growth rate per year from year 1 through year 5 0.12 Growth rate after year 5 0.05 Based on the equity free cash flow model, what is the price per share for the common stock
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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Ef 17.Can you please provide the explanation, formula and correct answer for the problem above?
Transcribed Image Text:Year
Revenue
Fixed costs
Variable costs
Add. investment in NWC
Add. investment in operating long-term
assets
Depreciation
Interest expenses
Newly issued debt
Principle repayments
Market value of the firm:
Short-term debt
Long-term debt
Common stock
Total
Cost of equity (Rs)
Tax rate
0
Select one:
O a. 16.39
O b.
12.45
O c.
10.98
O d.
14.34
Price
per share No. of shares Market value
200.00
600.00
18.00
0.1400
1
630.00
120.00
200.00
10.00
70.00
60.00
35.00
25.00
15.00
0.40
100
1,800.00
2,600.00
Growth rate per year from year 1 through
year 5
0.12
Growth rate after year 5
0.05
Based on the equity free cash flow model, what is the price per share for the common stock?
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