You are evaluating Adidas and expect it to generate the following free cash flows over your forecast horizon: Year 1 2 3 4 5 FCF ($ millions) 53.1 66.9 77.8 75.5 82.1 After your forecast horizon, you expect FCF to grow at 4.3% per year forever. If the weighted average cost of capital (dsicount rate) is 13.8%, what is: a. The enterprise value of Adidas. b. Assume Adidas has no excess cash, debt of $318 million, and 39 million shares outstanding, what is its stock price? Question content area bottom Part 1 a. The enterprise value will be $enter your response here million. (Round to two decimal places.) b. The stock price will be $enter your response here. (Round to two decimal places.)
You are evaluating Adidas and expect it to generate the following free cash flows over your forecast horizon: Year 1 2 3 4 5 FCF ($ millions) 53.1 66.9 77.8 75.5 82.1 After your forecast horizon, you expect FCF to grow at 4.3% per year forever. If the weighted average cost of capital (dsicount rate) is 13.8%, what is: a. The enterprise value of Adidas. b. Assume Adidas has no excess cash, debt of $318 million, and 39 million shares outstanding, what is its stock price? Question content area bottom Part 1 a. The enterprise value will be $enter your response here million. (Round to two decimal places.) b. The stock price will be $enter your response here. (Round to two decimal places.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
You are evaluating Adidas and expect it to generate the following free cash flows over your forecast horizon:
|
Year
|
1
|
2
|
3
|
4
|
5
|
|
FCF ($ millions)
|
53.1
|
66.9
|
77.8
|
75.5
|
82.1
|
After your forecast horizon, you expect FCF to grow at
4.3%
per year forever. If the weighted average cost of capital (dsicount rate) is
13.8%,
what
is:
a. The enterprise value of Adidas.
b. Assume Adidas has no excess cash, debt of
$318
million, and
39
million shares outstanding, what is its stock price?Question content area bottom
Part 1
a. The enterprise value will be
$enter your response here
million. (Round to two decimal places.)b. The stock price will be
$enter your response here.
(Round to two decimal places.)Expert Solution
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