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zepelin [54]
4 years ago
13

Suppose Boyson Corporation's projected free cash flow for next year is FCF1 = $150,000, and FCF is expected to grow at a constan

t rate of 6.5%. If the company's weighted average cost of capital is 11.5%, what is the firm's total corporate value? a. $2,572,125 b. $2,707,500 c. $2,850,000 d. $3,000,000 e. $3,150,000
Business
1 answer:
bearhunter [10]4 years ago
8 0

Answer:

The total corporate value of the firm is $3,000,000

Explanation:

The total corporate value of the firm is computed as:

Total corporate value = FCF1 / (average cost of capital - Growth rate)

Where

FCF1 is $150,000

Growth rate is 6.5%

average cost of capital is 11.5%

Putting the values :

= $150,000 / (11.5% - 6.5%)

= $150,000 / 5%

= $3,000,000

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Answer:

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What is the type of occupation of densist​
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Sen Corporation warrants carry the right to buy 6 shares of Sen common stock at $10.00 per share. The common stock has a current
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If the domestic demand curve is Equal 20p Superscript negative 0.5​, the domestic supply curve is Equal 5p Superscript 0.5​, and
pishuonlain [190]

Answer:

$52

$ 1.33

  • consumer price will increase
  • consumer surplus will decrease
  • import will decrease
  • reduced export
  • portends gloom for the general outlook for the economy

Explanation:

Given domestic demand curve, S(p) = 20p⁻⁰°⁵

the domestic supply curve S(p)= 5p⁰°⁵

world price is ​$7.00

using  calculus to determine the changes in consumer​ surplus

by consumer surplus means in this case supply exceeds demand

we establish the equilibrium point where the supply and demand functions meet or are equal

solving 20p⁻⁰°⁵ = 5p⁰°⁵

     20/5 = p⁰°⁵/p⁻⁰°⁵

       4 = p⁰°⁵⁺⁰°⁵

      4= p = q which is the quantity produced

     

consumer surplus =  maximum price willing to pay - Actual price

                             = ∫⁴₀  dp dp - p* q

                               =  ∫⁴₀20p⁻⁰°⁵ dp- 7* 4

                              = 20∫⁴₀p⁻⁰°⁵ dp -28

                              = 20/0.5 p⁰°⁵- 28

                              = 40 *4⁰°⁵ - 28 =  $52

producer surplus = it is a measure of producer welfare. It is measured as the difference between what producers are willing and able to supply a good for and the price they actually receive

thus  producer  surplus = p* q - ∫⁴₀  d(s) dp

                                         = 7 * 4 - ∫⁴₀  5p⁰°⁵  dp

                                         = 28 - 5 ∫⁴₀   p⁰°⁵    dp

                                         = 28 -5 *2/3  p¹°⁵  

                                          = 28 -5 *2/3  4¹°⁵

                                          =$ 1.33

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  • import will decrease
  • reduced exports
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