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Lemur [1.5K]
3 years ago
8

A company’s weighted average cost of capital is 10.8% per year and the market intrinsic value of its debt is $33.1 million. The

company’s free cash flow next year is expected to be $4.7 million and the free cash flow is expected to grow forever at a rate of 3.7% per year. If the company has three million shares of common stock outstanding, what is the intrinsic value per share? Question 6 options: A) $13.72 B) $9.48 C) $11.03 D) $12.24 E) $15.12
Business
1 answer:
VashaNatasha [74]3 years ago
4 0

Answer:

C. $11.03

Explanation:

We need to first compute the firm's value which is shown below.

Firm's value = Free cash flow ÷ (Weighted average cost of capital - Growth rate)

Firm's value = $4.7 million ÷ ( 10.8% - 3.7%)

= $4.7 million ÷ 7.1%

= $66,197,183

Stock price = (Firm value - Debt) ÷ Number of shares

= ($66,197,183 - $33,100,000) ÷ 3,000,000

= $33,097,183 ÷ 3,000,000

= $11.03

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The scripting process is answering interview questions using a formula which includes: A. directly answering the question, backi
defon

Answer:

A. directly answering the question, backing up the answer with a specific example, and tying the answer back to the company and/or the position.

Explanation:

There are various strategies for answering interview questions and the scripting process is one of them.

The scripting process involves the respondent going through the following steps:

- address the question that is asked

- provide and example that effectively backs up the answer

- highlighting the relevance of the answer to the company or position.

This process helps give a robust answer while displaying an understanding of the role requirements by the interviewee.

3 0
3 years ago
Sandoval needs to determine its year-end inventory. The warehouse contains 26,000 units, of which 3,600 were damaged by flood an
luda_lava [24]

Answer:

the  number of units that should Sandoval include in its year-end inventory is 29,600 units

Explanation:

The computation of the number of units that should Sandoval include in its year-end inventory is given below:

= Opening units + units purchased + units at consignee location - units damaged

= 26,000 + 2,600 + 4,600 - 3,600

= 29,600

Hence, the  number of units that should Sandoval include in its year-end inventory is 29,600 units

This is the answer but the same is not provided in the given options

6 0
3 years ago
Match the types of data validity to their respective descriptions.
Ivahew [28]
1 - D
2 - A
3 - B
4 - C

You’re welcome.
8 0
4 years ago
Read 2 more answers
At the beginning of 2018, England Dresses has an inventory of $140,000. However, management wants to reduce the amount of invent
Bad White [126]

Answer:

purchases = 160000

Explanation:

given data

beginning inventory = $140,000

amount of inventory on hand = $80,000

net sales = $400,000

gross profit rate = 40%

solution

we first Computation of cost of goods sold  hat is

Gross profit rate = \frac{gross profit}{net sales} × 100

= \frac{gross profit}{400000} = = \frac{40}{100}

= 100 Gross profit = 16000000

so

Gross profit = 160000

and

Cost of goods sold is = sales - gross profit

so

Cost of goods sold = 400000 - 160000

Cost of goods sold = 240000

and

Cost of goods sold = opening inventory + purchases - closing inventory  

so put here value

240000 = 140000 + purchases - 60000

so purchases = 160000

7 0
3 years ago
Veneer Company has two service departments and two producing departments. The number of employees in each department is: Personn
nirvana33 [79]

Answer:

Correct option is $27,140.70

Explanation:

Provided information,

Provided number of employees in each department

Personnel 10

Cafeteria 25

Producing department A 316

Producing Department B 339

Department cost of personnel department = $52,440

Using direct method this will be allocated to Producing Departments only

A = 316 employees

B = 339 employees

Total = 655

Therefore cost allocated to Department B = \frac{52,440}{655} \times 339 = 27,140.70

Correct option is $27,140.70

6 0
3 years ago
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