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xxTIMURxx [149]
2 years ago
10

A company's most recent free cash flow to equity was $100 and is expected to grow at 4% thereafter. The company's cost of equity

is 13%. Its WACC is 7.77%. What is its current intrinsic value
Business
1 answer:
vladimir2022 [97]2 years ago
3 0

Answer:

Current intrinsic value - equity = $1155.56

Explanation:

FCFE or Free cashflow to equity is the free cash flow attributable to the equity holders. Using the constant growth model of FCFE we can calculate the intrinsic value of the equity or intrinsic value per share. The formula for the constant growth model is as follows,

Value of equity = FCFE0 * (1+g)  /  (r - g)

Where,

  • FCFE0 is the most recent FCFE
  • g is the growth rate in FCFE
  • r is the required rate of return on equity

Current intrinsic value - equity = 100 * (1+0.04)  /  (0.13 - 0.04)

Current intrinsic value - equity = $1155.56

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Answer:

"To differentiate your movie theatre from others" is the correct answer.

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So that the above would be the correct answer.

7 0
2 years ago
"Dawn" is a song included in the sound track of "eDay," a movie produced and distributed by FasTrac Corporation. The song featur
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Answer:

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4 0
3 years ago
A non-governmental, not-for-profit organization held the following investments: Investment Cost Fair value (beginning of the yea
zysi [14]

Answer:

c. $24,850

Explanation:

A non-governmental, not-for-profit organization held the following investments: Investment Cost Fair value (beginning of the year) Fair value (end of the year) Stock A (100 shares) $50 per share $45 $51 Stock B (200 shares) $40 per share $41 $49 ; Bonds Cost $9,000 Fair value (beginning of the year) Fair value (end of the year)$10,000 $9,950

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Total............................................................................................$24,850

5 0
3 years ago
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True

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