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tatiyna
3 years ago
13

EMC Corporation has never paid a dividend. Its current free cash flow of $490,000 is expected to grow at a constant rate of 4.4%

. The weighted average cost of capital is WACC = 13%. Calculate EMC's estimated value of operations. Do not round intermediate calculations. Round your answer to the nearest dollar.
Business
1 answer:
disa [49]3 years ago
7 0

Answer:

$5,697,674

Explanation:

Dividend Valuation method is used to value the operations of a company based on the dividend paid, its growth rate and rate of return/WACC. The price is calculated by calculating present value of future dividend payment.

Free cash flow is the residual cash flow of operation after paying the capital expenditure from net income of the company. It represent the cash from the operations.

Formula to calculate the value of operation

Value of Operations = FCF / ( WACC - growth rate )

Value of Operations = $490,000 / ( 13% - 4.4% )

Value of Operations = $5,697,674

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I would say C: vocabulary. I don't have any other form of context so take my answer with a grain of salt, but that seems the most likely to me.

6 0
4 years ago
A macro factor underlying the trend toward greater globalization is:
gavmur [86]

Answer: Option (D) is correct.

Explanation:

A macro factor underlying the trend toward greater globalization is the decline in trade barriers since the end of world war II. One stage toward the pattern of globalization is that expelling the hindrances of exchanging merchandise and different things since the world war II for example since 1950s. Additionally another factor for globalization is changes in innovation.

6 0
3 years ago
14. On January 1, Nick Co. purchased a delivery truck for $60,000. The truck's salvage value is $2,000, and its estimated useful
vfiekz [6]

Answer: $12000

Explanation:

The amount of depreciation expense that Nick should record for the first year will be:

The depreciation will be:

= 1/no. of years

= 1/10

= 10%

Then, the rate of depreciation for double-declining will be:

= 10% × 2

= 20%

Then, the depreciation for the first year will be:

= $60000 × 20%

= $60000 × 0.2

= $12000

Therefore, the amount of depreciation expense that Nick should record for the first year is $12000.

Depreciation expense should Nick record for the first year is $12000

5 0
3 years ago
Ella has an offer to buy an item with a sticker price of $12,300 by paying $420 a month for 36 months. What interest rate is Ell
pentagon [3]

Answer:

18.65%

Explanation:

Cost = $12,300

Total Payment = $420 × 36

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Difference in the cost and payment = $15,120 - $12,300 = $2,820

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5 0
3 years ago
Read 2 more answers
You are valuing a company that is projected to generate a free cash flow of $16 million next year, growing at a stable 2.8% rate
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Answer:

$4.3

Explanation:

For computing the share price, first, we have to compute the Value of firm which is shown below

= Free cash flow ÷ (cost of capital - growth rate)

= $16 million ÷ (10.6% - 2.8%)

= $16 million ÷ 7.8%

= $205.12 million

Now find the equity value which equals to

= Value of firm - debt value + cash

= $205.12 million - $23 million + $8 million

= $190.12 million

And, the number of outstanding shares is 44 million

So, the price per share would equal to

= Equity value ÷ number of outstanding shares

= $190.12 million ÷ 44 million shares

= $4.3

7 0
4 years ago
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