1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
hichkok12 [17]
2 years ago
14

Quantitative Problem 2: Hadley Inc. forecasts the year-end free cash flows (in millions) shown below.

Business
1 answer:
Katarina [22]2 years ago
5 0

The stock price is mathematically given as

P=$57.64

<h3>What is the stock price?</h3>

Generally, the equation for is Value after year  mathematically given as

V=\frac{(FCF for year 5*Growth rate)}{(WACC-Growth rate)}\\\\V = \frac{(55.4*1.05)}{(0.09-0.05)}

V= $1454.25

Hence, the current value is mathematically given as

I=Discounting factor equal to the future cash flows multiplied by their present value

I=\frac{-22.76}{1.09} + \frac{38.8}{1.09^2}+ \frac{43.4}{1.09^3}+\frac{52.3}{1.09^4}+\frac{55.4}{1.09^5}+\frac{1454.25}{1.09^5}

I=$1063.508769

current value for ordinary stock

I'=$1037.508769million

In conclusion, the stock price is

P=(1037.508769/18)

P=$57.64

Read more about the stock price

brainly.com/question/15021152

#SPJ1

You might be interested in
Straight-Line: Amortization of bond discount LO P2 Skip to question [The following information applies to the questions displaye
natima [27]

Answer:

Legacy

1. Journal Entry:

January 1:

Debit Cash $570,443

Debit Bonds Discount $69,557

Credit Bonds Payable $640,000

To record the issuance of the bonds at a discount.

2. Total bond interest expense to be recognized over the bonds' life:

= $287,160

Explanation:

a) Data and Calculations:

January 1, 2019

Face value of bonds issued = $640,000

Price of bonds =                       $570,443

Bonds discount =                      $69,557 ($640,000 - $570,443)

Coupon interest rate = 8.5%

Market interest rate = 12%

Maturity period = 4 years

Interest payment = semiannual on June 30 and December 31

With straight-line amortization of bonds discount, the semiannual amortization will be = $8,695

Semi-annual interest payment = $27,200 ($640,000 * 4.25%)

Semi-annual interest expense = $35,895 ($27,200 + $8,695)

Annual interest expense = $71,790

1. Transaction Analysis

January 1:

Cash $570,443 Bonds Discount $69,557 Bonds Payable $640,000

2. Total bond interest expense to be recognized over the bonds' life:

= $287,160 ($71,790 * 4) or ($35,895 * 8)

6 0
2 years ago
Ttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttt
kow [346]

Answer:

uuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuu

Explanation:

5 0
2 years ago
Read 2 more answers
You want to invest $50,000 in a portfolio with a beta of no more than 1.4 and an expected return of 12.4%. Bay Corp. has a beta
IRISSAK [1]

Answer:

Assume the weight to be invested in Bay Corp is x. That means (1 - x) will be the weight for City Inc. The expression for the expected return will be;

(x * 11.2%) + ( (1 - x) * 14.8%) = 12.4%

0.112x + 0.148 - 0.148x = 0.124

-0.036x = -0.024

x = 0.67

Portfolio beta is;

= 0.67 * 1.2 + ( 1 - 0.67) * 1.8

= 1.398 so beta condition is satisfied.

Amount in Bay Corp.;

= 0.67 * 50,000

= $33,500

Amount in City Inc.;

= 50,000 - 33,500

= $16,500

8 0
3 years ago
The Human Services career path is where "public servants" of the world work.
Anton [14]

Answer:

false

Explanation:

5 0
2 years ago
for $32.45 per share, and the firm expects its per-share dividend to be $2.35 in one year. Analysts project the firm’s growth ra
Serggg [28]

Answer:

Cost of equity will be 12.96 %

Explanation:

We have given current price of the stock = $32.45

Expected dividend D_1=$2.35 in one year

Growth rate g=5.72%=0.0572

We have to find the cost of equity

Cost of equity is given by

Cost of equity =\frac{expected\ dividend}{current\ price\ of\ the \ stock}+growth\ rate=\frac{2.35}{32.45}+0.0572=0.1296 = 12.96 %

8 0
2 years ago
Other questions:
  • A stock with a beta equal to −1.0 has zero systematic (or market) risk. <br> a. True <br> b. False
    10·1 answer
  • The​ stockholders' equity of Kowalski Company at the beginning and end of 2018 totaled $ 122 comma 000 and $ 140 comma 000​, res
    12·1 answer
  • 7. The Johnsons are in an auto accident with a driver who lives near them in the same town. No one is injured but the Johnsons'
    11·2 answers
  • At the beginning of march, janet opened a checking account with her first paycheck of $153.82. during the month, she withdrew $4
    9·2 answers
  • What are examples of the factors of production that affect the output of a car repair shop?
    9·2 answers
  • For the purpose of process analysis, which of the following measures would be considered an appropriate flow unit for analyzing
    10·1 answer
  • Paul, a manager at a logistics company. Wants to have Emma, a temporary worker, handle customers’ queries. Paul’s colleague. Ali
    10·1 answer
  • you are going to deposit $19000 today. You will earn an annual rateof 3.3 percent for 11 years, and then earn an annual rate of
    14·1 answer
  • g During Year 2, the company experienced the following events: Purchased inventory that cost $5,200 on account from Ross Company
    11·1 answer
  • No one answer then till my girly answers
    5·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!