1 &flushed; false&ld; S05752¢erwa; yes&h; Christina Lovering 5/29/16 10:41 A
ID: 2729382 • Letter: 1
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1 &flushed; false&ld; S05752¢erwa; yes&h; Christina Lovering 5/29/16 10:41 AM Overview Homework: Assignment 4 8)(9) (10 P7 16 tsrniarto) Lxercise Score: Oof 10 pts Assignment Score: 0% (0 of 100 pts) 0 of 10 complete - Free cash now valuation Nabor lo stres s cons demg gomg public but is unsure of a far of ermg pnce for the company. Before irme aninves ment an er to assrst m ma mg the public offermg managers at Na or have decided to make ther own es mate of the inn's common stock ealue. The firm's CFO has gathered data for performing the valuation using the free cash flow valuation model The ir s weighted r erage cost ofcapitals l tes, and t has S3 890,000 of debt at market value and S780,000 of preferred stock at its assumed market value. The est andree cash flows over the next 5 years 2016 through 2020 are green m the table, Beyond 2020 toinfniry, the frm expects its free cash flow to grow by 6% annually a. Estimate the value ofNabor Industries entire company by using the free cashflow valuation model b. Use your finding in part a, along with the data provided above, to find Nabor Industries' common stock value, c If the fm plans to issue 200 000 shares of common stock, what is its estimated value per share? a. The vahe ofNabor Industries' entire company is s Es (Round to the nearest dollar) Enter your answer in the answer box, then click Check Answer 2parts remaining C. Clear Allad, Check Answer SaveExplanation / Answer
Year Estimated Free Cash Flows 2013 200,000 2014 250,000 2015 300,000 2016 310,000 PV 0f Cahs Flows 2013-2017 $1,014,357.77 2017 350,000 PV 0f Cahs Flows 2018 and onwards 2,674,240.05 2018 360500 Firm Value 3,688,597.82 a) Firm Value 3,688,597.82 b) Common Stock Value 1,788,597.82 c) Per Share 8.942989084
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