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horrorfan [7]
2 years ago
15

Gonzales Corporation generated free cash flow of $88 million this year. For the next two years,the companyʹs free cash flow is e

xpected to grow at a rate of 10%. After that time, the companyʹsfree cash flow is expected to level off to the industry long-term growth rate of 4% per year. Ifthe weighted average cost of capital is 12% and Gonzales Corporation has cash of $100 million,debt of $300 million, and 100 million shares outstanding, what is Gonzales Corporationʹsexpected terminal enterprise value in year 2?
A) $1384.24
B) $1245.82
C) $1107.39
D) $968.97
Business
1 answer:
vodka [1.7K]2 years ago
6 0

Answer:

A) $1384.24

Explanation:

Terminal Value = Free Cash Flow (FCF) of last forecast *(1+ perpetual growth rate)/(discount rate – perpetual growth rate)

FCF of last forecast = $88*(1+10%)^2 = $106.48

Gonzales Corporationʹs expected terminal enterprise value in year 2 = $106.48 * (1+4%)/(12%-4%) = $1382.24

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pentagon [3]

Answer:

A pay policy line <u>reflects the pay structure in the market, which always matches rates in the organization.</u>

Explanation:

A pay policy line is the salary level and organization chooses to pay its employees compared to the standard salary level in the market.

Organizations would prefer not to overpay or underpay their employees. Therefore they consider the standard pay structure of the market and match the amount they pay their employees to this structure.

8 0
3 years ago
Select the true statement or statements regarding the loanable funds market. Foreign entities cannot save in the United States.
Shalnov [3]

<u>Solution: </u>

The following are the correct and incorrect options

<u>Correct option</u>: Households used to save and those savings are utilized for investment through the intermediaries like bank. Firms and governments take those funds for their investment acts.

<u>Correct option</u>: Foreigner can invest in the US (suppose foreign direct investment) but can’t save here, since there is difference in currency (suppose a foreigner earns in pond can’t save in US dollar).

<u>Other options are not correct: </u>

<u>Incorrect option</u>: Savings means personal savings, which are not yet kept into a bank.

<u>Incorrect option</u>: such purchases are investments but not savings.

3 0
3 years ago
Citizens file income tax is to a sure that they will receive ?
anastassius [24]

Answer:

Down below

Explanation:

Citizens file income taxes to ensure that they will receive a if they paid too much in taxes throughout the year. Employers supply a to help citizens file their tax returns.

5 0
3 years ago
Borrowers choosing an adjustable-rate mortgage
Leviafan [203]

Answer:

okok

Explanation:

3 0
2 years ago
Hayduke Corporation reported the following results from the sale of 5,000 units in May: sales $300,000, variable costs $180,000,
bazaltina [42]

Answer:

4,444.44 units

Explanation:

For the computation of Number of units to be sold to earn target profit first we need to follow some steps which are shown below:-

Selling price per unit = Sales ÷ Number of units sold

= $300,000 ÷ 5,000

= $60

Variable cost per unit = Total variable cost ÷ Number of units sold

= $180,000 ÷ 5,000

= $36

Increase in selling price = $60 × 5%

= $3

New selling price per unit = $60 + $3

= $63

New contribution margin per unit = New selling price per unit - Variable cost per unit

= $63 - $36

= $27

Number of units to be sold to earn target profit = (Fixed cost + Target profit) ÷ Contribution margin per unit

= ($90,000 + $30,000) ÷ $27

= $120,000 ÷ $27

= 4,444.44 units

7 0
3 years ago
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