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Fiesta28 [93]
3 years ago
5

You have been assigned the task of using the corporate, or free cash flow, model to estimate Petry Corporation's intrinsic value

. The firm's WACC is 10.00%, its end-of-year free cash flow (FCF1) is expected to be $70.0 million, the FCFs are expected to grow at a constant rate of 5.00% a year in the future, the company has $200 million of long-term debt and preferred stock, and it has 30 million shares of common stock outstanding. What is the firm's estimated intrinsic value per share of common stock?
Business
1 answer:
Oxana [17]3 years ago
6 0

Answer:

$40 million

Explanation:

The computation of stock price is shown below:-

For computing the stock price first we need to compute the firm value which is below:-

Firm value = Free cash flow-1 ÷ (Weighted average cost of capital - Growth rate)

= $70.0 million ÷ (10% - 5%)

= $70.0 million ÷ 5%

= $1,400 million

Stock price = (Firm value - Debt) ÷ Number of shares

= ($1,400 million - $200 million) ÷ 30 million

= $1,200 million ÷ 30 million

= $40 million

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SashulF [63]

Answer:

It is both qualitative data and primary data.

Explanation:

Qualitative data is data that is not expressed in numerical values. Kay & Maggie are asking for opinons in the survey and interviews. These opinons are not numbers, they are words, language, therefore, they are qualitative.

It is primary data because Kay & Maggie are collecting the information directly from the desired source, the customers, instead of collecting the data from a third party.

7 0
3 years ago
In the far off kingdom of Viracien there is a healthy sized population of citizens over 16 years old. The last census indicated
Anarel [89]

Answer:

6.5%

Explanation:

Number of people unemployed = 237,000

Labor force = 5 million - 1.3 million - 50,000

Labor force = 3.65 million

Unemployment rate = Number of people unemployed/Labor force*100

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Unemployment rate = 6.4931501%

Unemployment rate = 6.5%

8 0
3 years ago
Suppose the current market price of corn is $3.75 per bushel. Your firm has a technology that can convert 1 bushel of corn to 3
Aleks04 [339]

Answer:

At 1.783 or more, the conversion yield better gain than sales the corn

Explanation:

The ethanol conversion become attractive if the cost for doing the conversion are lower than the sale revenue for the product.

<u>total cost: raw materials + conversion cost</u>

corn price:           $  3.75

conversion cost:  $  1.60

Total cost:            $  5.35

<u>output: gallon of ethanol per bushel</u>

3 gallons of ethanol per bushel

total cost / output = 5.35/3 = 1.783 cost per gallon

5 0
3 years ago
How can you make yourself "visible" when telecommuting?
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-Effective Remote Performance

-Company culture and customs

-Visibility with boss and co-workers.

-Call your Boss everyday

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The first step in the human resource planning process is forecasting. Forecasting is an attempt to determine the supply and dema
sesenic [268]

Answer:

Missing word <em>"Roll over each of the items below to read about the proportion of marketing employees at different times. Then drag each item into the correct position in the matrix."</em>

Note: The matrix in the question is attached as picture below

Year                                            2016

                   Sales mgr        Sales Rep         Sales asst.         Not in

                                                                                              Organisation

<em>2012</em>

Sales           Maintain         Management        Manager         Manager

manager    Management  Representative     Assistant        Turnover

                    Position             Demotion           Demotion

Sales Rep   Sales Rep      Maintain Rep       Rep assistant     Sales Rep

                    Promotion        Position               Demotion

Sales          Asst manager   Management    Maintain asst.     Sales Asst

assistant     Promotion          Promotion         position             Turnover

Not in        Manager New   Sales Rep          Sales Assistant

Organi-       Hire                   New Hire            New Hire

sation

7 0
3 years ago
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