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$10.00 FIN 534 HOME WORK HELP(10 QUESTIONS)

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  • Due on Aug. 30, 2012
  • Asked on Aug. 20, 2012 at 05:30:16AM
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shubh
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fin 534 home work help

there are 5 questions from chapter 12 and 5 wquestions from chapter 13

Suppose Leonard, Nixon, & Shull Corporation’s projected free cash flow for next year is $100,000, and FCF is expected to grow at a constant rate of 6%.  If the company’s weighted average cost of capital is 11%, what is the value of its operations?

 

Leak Inc. forecasts the free cash flows (in millions) shown below.  If the weighted average cost of capital is 11% and FCF is expected to grow at a rate of 5% after Year 2, what is the Year 0 value of operations, in millions?  Assume that the ROIC is expected to remain constant in Year 2 and beyond (and do not make any half-year adjustments).

 

            Year:                   1           2

            Free cash flow:       -$50        $100

 

Based on the corporate valuation model, the value of a company’s operations is $1,200 million.  The company’s balance sheet shows $80 million in accounts receivable, $60 million in inventory, and $100 million in short-term investments that are unrelated to operations.  The balance sheet also shows $90 million in accounts payable, $120 million in notes payable, $300 million in long-term debt, $50 million in preferred stock, $180 million in retained earnings, and $800 million in total 

 

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  • Posted on Aug 20, 2012 at 4:43:21PM
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FI515-3rd problem.xlsx (8K)
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