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inysia [295]
3 years ago
12

Year 1 2 3 4 5 Free Cash Flow ​$22 million ​$26 million ​$29 million ​$30 million ​$32 million General Industries is expected to

generate the above free cash flows over the next five​ years, after which free cash flows are expected to grow at a rate of ​% per year. If the weighted average cost of capital is ​% and General Industries has cash of ​million, debt of ​million, and 80 million shares​ outstanding, what is General​ Industries' expected current share​ price?
Business
1 answer:
RoseWind [281]3 years ago
3 0

Answer:

$7.78

Explanation:

Calculation to determine what is General Industriesʹ expected current share price

First step is to calculate the FCF6

FCF6 = $32 million × (1 + 0.05)

FCF6= $33.6 million

Second step is to calculate the V5

V5 = $33.6 million / (0.09 - 0.05)

V5= $840 million

Third step is to calculate V0 using financial calculator

V0 = 652.45 million

Now let calculate expected current share price

P0 = $(652.45 + 15 - 45) million / 80 million

P0 = $7.78

Therefore General Industriesʹ expected current share price is $7.78

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Emerging technologies refers to a new technology or technological innovations. The problem is that what can be considered new and how fast will it become obsolete? Our world is changing so fast, that current technology will be obsolete in just a few months, or maybe a year from now.

Because new technologies become old too fast, it is very difficult to identify them before they are no longer an innovation. Only those technologies that become mainstream can be clearly identified as emerging technologies, e.g. the iPhone was considered an emerging technology in 2007 and even though the first iPhone is obsolete now, it became mainstream technology.

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What is the current yield for a $1000 corporate bond that pays 8.0 percent and has a current market value of $870?
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The current yield for a corporate bond = 9.19 %

Calculation :

Amount of annual interest = face value × rate of interest

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Then, Current yield = amount of annual interest / current price

                                 = 8000%  ÷ $870

                                = 9.19 %

Do corporate bonds pay interest?

Corporate bonds pay interest semi-annually, which suggests that, if the coupon is five percent, each $1000 bond can pay the bondholder a payment of $25 every six months--a total of $50 per year

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Learn more about current yield :

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Step 5 in the marketing plan process is when a firm ______ the outcome of the strategy and implementation process. Multiple choi
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Step 5 in the marketing plan process is when a firm evaluates the outcome of the strategy and implementation process.

<h3>What is the marketing plan process?</h3>

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The correct answer is Indirect exporting.

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