PRIN.OF CORPORATE FINANCE
13th Edition
ISBN: 9781260013900
Author: BREALEY
Publisher: RENT MCG
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Chapter 4, Problem 12PS
Constant-growth DCF model Pharmecology just paid an annual dividend of $1.35 per share. It’s a mature company, but future EPS and dividends are expected to grow with inflation, which is
- a. What is Pharmecology’s current stock price? The nominal cost of capital is 9.5%.
- b. Redo part (a) using forecasted real dividends and a real discount rate.
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Title: Constant Growth Model (new div - CAPM)
You are considering buying common stock in Grow On, Inc. You have projected that the next dividend the company will pay will equal $7.60 and that dividends will grow at a rate of 6.0% per year thereafter. The firm's beta is 0.93, the risk-free rate is 6.1%, and the market return is 13.6%. What is the most you should pay for the stock now?
Question
North-Ireland Cooling’s management has made the projections shown in Table below. Use this table as a starting point to value the company. The WACC for North-Ireland Cooling is 10% and the long-run growth rate after year 4 is 7%. The company has $15,000 debt and 850 shares outstanding. Tax rate is 0.30.
a) Calculate the free cash flows to the firm
b) What is the firm value?
c) What is the equity value?
d) What is the intrinsic value of share?
Show your steps in your calculations.
Please answer as soon as possible
Please answer fast i give upvote
Chapter 4 Solutions
PRIN.OF CORPORATE FINANCE
Ch. 4 - Stock markets True or false? a. The bid price is...Ch. 4 - Stock quotes a. I would like to sell 1000 shares...Ch. 4 - Stock quotes Here is a small part of the order...Ch. 4 - Stock quotes Go to finance.yahoo.com and get...Ch. 4 - Valuation by comparables Look up P/E and P/B...Ch. 4 - Dividend discount model True or false? a. All...Ch. 4 - Dividend discount model Respond briefly to the...Ch. 4 - Dividend discount model Company X is expected to...Ch. 4 - Dividend discount model Company Y does not plow...Ch. 4 - Constant-growth DCF model Company Zs earnings and...
Ch. 4 - Prob. 11PSCh. 4 - Constant-growth DCF model Pharmecology just paid...Ch. 4 - Prob. 13PSCh. 4 - Cost of equity capital Under what conditions does...Ch. 4 - Cost of equity capital Each of the following...Ch. 4 - Two-stage DCF model Company Z-prime is like Z in...Ch. 4 - Two-stage DCF model Consider the following three...Ch. 4 - Two-stage DCF model Company Qs current return on...Ch. 4 - Two-stage DCF model Compost Science Inc. (CSI) is...Ch. 4 - Growth opportunities If company Z (see Problem 10)...Ch. 4 - Growth opportunities Alpha Corps earnings and...Ch. 4 - Prob. 24PSCh. 4 - Prob. 25PSCh. 4 - Prob. 26PSCh. 4 - Horizon value Suppose the horizon date is set at a...Ch. 4 - Valuing a business Permian Partners (PP) produces...Ch. 4 - Valuing a business Construct a new version of...Ch. 4 - Valuing a business Mexican Motors market cap is...Ch. 4 - Valuing a business Phoenix Corp. faltered in the...Ch. 4 - Constant-growth DCF formula The constant-growth...Ch. 4 - DCF valuation Portfolio managers are frequently...Ch. 4 - Valuing a business Construct a new version of...
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