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iren2701 [21]
3 years ago
14

Scampini Technologies is expected to generate $125 million in free cash flow next year, and FCF is expected to grow at a constan

t rate of 3% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 12%. If Scampini has 65 million shares of stock outstanding, what is the stock's value per share
Business
1 answer:
otez555 [7]3 years ago
5 0

Answer:

$21.37

Explanation:

Firm value = FCF1 / (WACC – g)

Firm value = $125,000,000/(0.12 – 0.03)

Firm value = $1,388,888,888.89

Equity value per share = Equity value / Shares outstanding

Equity value per share = $1,388,888,888.89 / 65,000,000

Equity value per share = $21.37

You might be interested in
Pearl Corporation reported net income of $49,100 in 2020. Depreciation expense was $17,200. The following working capital accoun
aliya0001 [1]

Answer:

Net operating cash flow   $68,300

Explanation:

Operating cash flow is the amount of cash generated by a company from its main and normal business activity. This cash flow is useful to gauge the financial viability of a firm's business activity; the larger the better.

It is essentially computed as the net movement of cash inflow and outflow in respect of a business activities.

It is computed as follows:                          

                                                                  $

Net income                                              49,000

Add deprecation                                      17,200

Less increase in receivable                    (11.200)

add increase in payables                         <u>13,300</u>

Net operating cash flow                          <u> 68,300</u>

Note that only items that relate to trading which is the core business area of the Pearl Corporation are considered. Depreciation is  added because it is a non-cash item initially deducted from net income.

An increase in receivable means a reduction in cash while an increase in payables implies cash savings

Net operating cash flow   $68,300

3 0
2 years ago
When Frank buys his own house, he would like to have a home theater system and a jacuzzi. He plans to save enough money in the n
Basile [38]

Answer:

c

Explanation:

he wants all of those things

5 0
3 years ago
Your boss, Kerry Miller, has asked you to analyze the soft drink industry using Porter's five forces model. Which of the followi
IgorC [24]

Answer:<em> Option (A) is correct.</em>

Vitamin water, juice, coffee are other beverage options available to consumers are the one that can represent substitute products in the soft drink industry.

The five forces can be referred to as a model for business analysis that helps to elaborate on why different industries in a certain market are able to endure different levels of profitability. These forces are often used to evaluate competition depth, appeal, and profitability of the market.

4 0
3 years ago
Santiago company incurs annual fixed costs of $66,000. variable costs for santiago's product are $34 per unit, and the sales pri
babunello [35]

Answer: 6250

Explanation:

From the question, we are informed that Santiago company incurs annual fixed costs of $66,000. variable costs for santiago's product are $34 per unit, and the sales price is $50 per unit. santiago desires to earn an annual profit of $34,000.

The contribution margin ratio approach to determine the sales volume in dollars and units required to earn the desired profit for thus:

Contribution margin ratio = (Sales price - Variable cost)/Sales price

= (50-34)/50

= 16/50

= 0.32

Sales = (66,000 + 34,000)/0.32

= 100,000/0.32

= 312,500

Sales volume in units will be sales divided by price. This will be:

= 312,500/50

= 6250

6 0
3 years ago
Vintage Fun reproduces old-fashioned style roller skates and skateboards. The annual production and sales of roller skates is 1,
Vesna [10]

Answer:

D. $33.47

Explanation:

The computation of overhead cost per skateboard using an activity-based costing system is shown below:-

                                    Total          Expected           Activity

Activity pool cost      Overheads    Activity               Rate

Setup cost                     $6,550           665                9.85

Engineering cost          $16,000        1,120                14.29

maintenance cost        $91,450        4,353               21.01

Activity pool cost          Rate             Driver         Overhead cost  

Setup cost                       9.85              320              3,152  

Engineering cost             14.29             630             9,002.7

maintenance cost            21.01              2,178           45,759.78  

Total Overheads cost                                               57,914.48

Number of units                                                               1,730

Overhead cost per unit                                                $33.48

Therefore for computing the overhead cost per unit we simply divide the total overhead cost by number of units.

8 0
3 years ago
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