Answer:
Heavy Metal Corporation is expected to generate the following free cash flows over the next five years: (Click on the following icon in order to copy its contents into a spreadsheet.) 2 3 Year FCF (5 million) 53. 6 66.2 78. 6 4 75. 3 . 5 82.5 After that, the free cash flows are expected to grow at the industry average of 4.4% per year. Using the discounted free cash flow model and a weighted average cost of capital of 13.6% a. Estimate the enterprise value of Heavy Metal. b. If Heavy Metal has no excess cash, debt of $288 million, and 42 million shares outstanding, estimate its share price. a. Estimate the enterprise value of Heavy Metal The enterprise value will be $ million. (Round to two decimal places.) b. If Heavy Metal has no excess cash, debt of $288 million, and 42 million shares outstanding, estimate its share price. price. The stock price per share will be $ (Round to two decimal places.)
Explanation:
Answer:
An increase in mortgage interest rates.- D.
Answer:
$85,000 and $65,000
Explanation:
Let us the short term note be X for 10%
And, the long term note for 8% is ($150,000 - X)
Now the equation is
0.10X + 0.08 × ($150,000 - X) = $13,700
0.10X + 12,000 - 0.08X = $13,700
0.02X = $13,700 - $12,000
0.02X = $1,700
So, X = $85,000
And, at 8% it would be
= $150,000 - $85,000
= $65,000
Hence, for 10% it is $85,000 and for 8% it is $65,000
Answer:
c. $74,450
Explanation:
The computation of the Net present value is shown below
= Present value of all yearly cash inflows after applying discount factor + salvage value - initial investment
where,
The Initial investment is $120,000
All yearly cash flows would be
= Annual net operating cash inflows × PVIFA for 6 years at 14%
= $50,000 × 3.8887
= $194,435
Refer to the PVIFA table
Now put these values to the above formula
So, the value would equal to
= $194,435 - $120,000
= $74,435 approx