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PIT_PIT [208]
4 years ago
12

A company is projected to have a free cash flow of $329 million next year, growing at a 5.7% rate until the end of year 3.

Business
1 answer:
uysha [10]4 years ago
7 0

Answer:

$14.35

Explanation:

Firstly, we need to calculate enterprise value (EV) of this company, which is equal to present value of all free cashflows (CF):

  • Terminal value of free cashflow at year 3 = Year 4 CF/(Cost of capital - Long-term growth) = [329 x (1 + 5.7%)^2 x (1 + 2.1%)]/(13.3% - 2.1%) = $3,350.84
  • EV of the company =  329/(1 + 13.3%) + [329 x (1 + 5.7%)]/(1 + 13.3%)^2 + [329 x (1 + 5.7%)^2 + 3,350.84]/(1 + 13.3%)^3 = $3,117.91

Secondly, we calculate equity value as below:

EV = Equity value + Net debt = Equity value + (Debt - Cash), or:

3,117.91 = Equity value + (64 - 18), or  Equity value = $3,071.91.

Finally, stock price of the company = Equity value/Number of shares = 3,071.91/214 = $14.35.

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Professor Sanford explains that the need for physical safety must be met before city dwellers will be motivated to form close fr
ELEN [110]

Answer:

B. a hierarchy of motives

Explanation:

Abraham Maslow's hierarchy of needs emphasized upon the fact that once an individual is successfully able to satisfy the most basic needs, he/she moves towards fulfillment of other higher needs in the hierarchy which are less basic.

Maslow specified 5 needs in the order of priority, namely, basic psychological needs of food and shelter, security needs relating to being healthy and safe at the same time job security, belongingness which refers to being loved and socially accepted, esteem needs relating to an individual possessing self respect and commanding respect, self actualization needs which refer to achieving as per one's full potential.

The given case specifies security needs i.e physical safety and then the need for belongingness i.e friendship.

4 0
4 years ago
Jane receives an email claiming that her bank account information has been lost and that she needs to click a link to update the
Anna007 [38]

Answer:

<em>Phishing</em>

Explanation:

Phishing is a cyber attack, in which hackers and other criminals try to gather personal data like passwords, photographs, money, access to cloud files, etc. via deceptive emails with links, sent to thousands and thousands of people.

If Jane clicks and provides her passwords, and other personal information into a form, trusting it is a legitimate bank , then She may lose all her money and have many other problems like a cloned credit card, privacy, etc.

5 0
3 years ago
Pop owns 87% of the common stock of Sugar. On December 31, 2017, Pop's Receivables include $296,880 that Pop advanced to Sugar.
Sloan [31]

Answer: $296,880

Explanation:

Pop owns more than 50% of Sugar which means that Sugar is a subsidiary of Pop's. When this happens, trade between the two are not shown in the consolidated financial statement unless the goods traded have been sold off to a third party.

As these goods have not, and are still considered accounts receivable to Sugar, the entire amount will be removed from the consolidated financial statements.

6 0
3 years ago
The following information relates to next year's projected operating results of the Children's Division of Grunge Clothing Corpo
Komok [63]

Answer:

The annual financial disadvantage of eliminating the division is $30,000.

Explanation:

contribution margin = revenue - variable costs = $200,000

fixed expenses = $500,000

net loss = $300,000.

If the division is eliminated, only $170,000 of the fixed expenses can be avoided, therefore the company's fixed expenses will remain at $330,000.

Therefore, eliminating the children's division will result in a $30,000 (= $330,000 - $300,000) decrease in net income.

4 0
3 years ago
You want to have $5 million in real dollars in an account when you retire in 40 years. The nominal return on your investment is
motikmotik

Answer: $18,128.27

Explanation:

Real interest rate = [( 1 + Nominal rate ) / ( 1 + inflation rate)] - 1

= [(1 + 13%) / ( 1 + 4.4%) ] - 1

= 8.2375478927203065134%

This is dealing with the future value of an annuity where $5,000,000 is that future value.

Future Value of an annuity = Amount * {[((1 + r )^n) - 1] / r}

5,000,000 = Amount * {[((1 + 8.2375478927203065134%% )^ 40) - 1] / 8.2375478927203065134%}

5,000,000 = Amount * 275.81229325572622843153903061969

Amount = 5,000,000/275.81229325572622843153903061969

= $18,128.27

7 0
3 years ago
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