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
julsineya [31]
3 years ago
10

Scampini Technologies is expected to generate $25 million in free cash flow next year, and FCF is expected to grow at a constant

rate of 4% per year indefinitely. Scampini has no debt or preferred stock, its WACC is 10%, and it has zero non-operating assets. If Scampini has 40 million shares of stock outstanding, what is the stock’s value per share?
Business
1 answer:
Feliz [49]3 years ago
7 0

Answer:

The stock’s value per share is $10.42

Explanation:

For:    

FCF1 = Expected cash flow of the firm

        = $25 million  

WACC = 10%    

g = 4%    

Firm value = FCF1/(WACC - g)    

                  = 25,000,000/(0.10 - 0.04)    

                  = $416,666,666.67    

We know that there is no debt & preferred stock, so the firm value will be equal to Equity value :

Firm value = Equity value

                 = $416,666,666.67

stock value per share = Equity Value/No. of share outstanding

                                     = $416,666,666.67/40,000,000

                                     = $10.42 per share

Therefore, The stock’s value per share is $10.42

You might be interested in
5 year plan example for high school seniors
SOVA2 [1]

\huge{ \underline{ \underline{ \mathtt{ \purple{A} \pink{N} \green{S} \blue{W} \red{E} \orange{R}}}}}♡

A five year plan is a list of priorities you would like to accomplish over the next several years. As well as actions you can take when you make mistakes, so that you can still meet those goals.

Hope it helps ♡♡

7 0
2 years ago
_____ is a method for determining the estimated annual costs and benefits for a project.
kozerog [31]
Earned value management

5 0
3 years ago
Shamrock Company's accounts receivable arising from sales to customers amounted to $142000 and $124000 at the beginning and end
aleksandr82 [10.1K]

Answer:

$557,000

Explanation:

Operating activities: It includes those transactions which affect the working capital. It means that the increase in current assets and a decrease in current liabilities would be deducted and a Decrease in current assets and an increase in current liabilities would be added.  

The computation is shown below:

= Income reported on the income statement + decrease in account receivable

= $539,000 + $18,000

= $557,000

The decrease in account receivable

= $142,000 in beginning of the year - $124,000 in end of the year

= $18,000

8 0
3 years ago
McCann Co. has identified an investment project with the following cash flows.
Ugo [173]

Answer:

The present value at 11% is $3,902.13,$3,479.85  at 16% and $2,615.57  at 30%

Explanation:

The present value formula is given as :

PV=FV/(1+r)^n

Where FV is the future value of cash flows such as the ones given in the question

r is the rate of return at 11%,16% and 30%

n is the applicable time horizon relevant to each of the cash flow.

Find attached spreadsheet for detailed calculations.

Download xlsx
7 0
3 years ago
Read 2 more answers
Bramble Corp. incurs the following costs to produce 9900 units of a subcomponent: Direct materials$8316 Direct labor11187 Variab
matrenka [14]

Answer:

$3,762

Explanation:

The computation is as seen below

Total cost when the production is 9,900 units

Direct materials $8,316

Direct labor $11,187

Variable overhead $12,474

Total $31,977

But,

Their new cost on supplier offer is

= $2.85 × 9,900 units

= $28,215

In the case when the order is accepted, the net income would increase by

= $31,977 - $28,215

= $3,762

5 0
3 years ago
Other questions:
  • Direct materials used for the period cost $66,000; Direct labor cost $80,000; Applied overhead was $60,000; Beginning work in pr
    14·1 answer
  • A(n) _____ represents a single character, such as a letter, number, or symbol. select one:
    11·1 answer
  • If you are installing an expansion card into a case that does not have enough clearance above the motherboard for the card, what
    7·1 answer
  • hich of the following statements is true? The denominator used in computing earnings per share represents the shares of common s
    9·1 answer
  • Melinda earns wages of $80,000, income from a limited partnership of $10,000, and a $30,000 passive activity loss from a real es
    8·1 answer
  • Tobin inherited 100 acres of land on the death of his father in 2019. A Federal estate tax return was filed and the land was val
    7·1 answer
  • Sell or Process Further Port Allen Chemical Company processes raw material D into joint products E and F. Raw material D costs $
    7·1 answer
  • On June 25, Snap Repair Service extended an offer of $170,000 for land that had been priced for sale at $194,000. On July 9, Sna
    15·1 answer
  • Describe how an unrelated tenant in common or joint tenant should protect him- or herself from potential liability (for negligen
    12·1 answer
  • What is an emergency fund?
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!