a EBIT-Taxes Depreciation Capital spending- Increases in net working capita EBIT

Question

a EBIT-Taxes Depreciation Capital spending- Increases in net working capita EBIT+Taxes+ Depreciation- Capital spending- Increases in net working capital C. EBIT-Taxes-Depreciation-Capital spending Increases in net working capital d. EBIT- Taxes Depreciation Capital spending- Increases in net working capital e. EBIT Taxes+ Depreclation-Capital spending Increases in net working capital 6. Zhdanov Inc. forecasts that its free cash flow from operations (FCF) in the coming yearttl, will be 510 million, but its FCF at T, will be $20 million. After Year 2, FCF is expected to grow at a constant rate of 4% forever. Ifthe weighted average cost of capital is 12%, what is the value of the firm, millions? a. $193.23 b. $214.29 c $229.09 d. $290.80 e. None of the above. Specity: 7. A firm has an EBIT of $37,300, depreciation of $4,600, interest of $1,200, and taxes of $40o.is EBITDA multiple is 9.4. What is the value of the firm? $393,860 $503,580 $574,420 $645,260 e $668,110 8. Huxley Building Supplies last free cash flow was $1.75 million. Its free cash flow growth rate is expected to be constant at 25% for 2 years, after which free cash flows are expected to grow at a rate of 6% forever. Its weighted average cost of capital WACC is 12%. Hurley has SS milion in short-term investments and $7 million in debt and has 1 million shares outstanding. What is the best estimate of the current intrinsic stock price? b. c. d. e. $28.51 532.51 $34.11 $35.71 $47.64

Explanation / Answer

5) Option A

6)

value = 10 / (1+12%) + 20/(1+12%)2 + (20*(1+4%)/(12%-4%))/(1+12%)2

          = 232.14 (Option E) None of the above

7)

EBITDA = 37300 + 4600 = 41900

value = 41900*9.4 = 393860 (Option A)

8)

Value = 1.75*(1+25%)/(1+12%) + 1.75*(1+25%)2/(1+12%)2 + (1.75*(1+25%)2 (1+6%)/(12%-6%))/(1+12%)2

        = 42.64323

Equity value = 42.64323 + 5 - 7 = 40.64323

Share price = 40.64323 / 1 = 40.64 (something wrong in options)

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.