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PSYCHO15rus [73]
3 years ago
10

Value of Operations Kendra Enterprises has never paid a dividend. Free cash flow is projected to be $80,000 and $100,000 for the

next 2 years, respectively; after the second year, FCF is expected to grow at a constant rate of 10%. The company's weighted average cost of capital is 18%. What is the terminal, or horizon, value of operations
Business
1 answer:
Musya8 [376]3 years ago
8 0

Answer:

Value of Operations Kendra Enterprises has never paid a dividend. Free cash flow is projected to be $80,000 and $100,000 for the next 2 years, respectively; after the second year, FCF is expected to grow at a constant rate of 10%. The company's weighted average cost of capital is 18%. What is the terminal, or horizon, value of operations

 Terminal value   = $1,783,333.33

Explanation:

Terminal value = FCF3/(WACC � g2)

FCF3 = FCF2 x 1.07 = $100,000 x 1.07 ? $107,000

      = $107,000/(.13 - .07)

      Terminal value = $1,783,333.33

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The level of economic growth may affect the amount and number of people who spend on entertainment leading to a decline in revenue and an increased need for aggressive marketing campaigns.

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Each country may already have other cable TV companies that a percent of the market share and so this it becomes a challenge to compete with these domestic companies.

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3 years ago
Maria, the vice president of sales for an international organization, believes that employees in her foreign offices understand
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3 years ago
The job _______ results in two written statements: one that specifies the responsibilities, duties and working conditions of the
elena-14-01-66 [18.8K]

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3 years ago
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8 0
3 years ago
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J Corporation has two divisions. Division A has a contribution margin of $79,300 and Division B has a contribution margin of $12
Allushta [10]

Answer:

Net income= $98,200

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Giving the following information:

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<u></u>

Net income= (79,300 + 126,200) - 72,400 - 34,900

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