1 answer

Brandtly Industries invests a large sum of money in R&D; as a result, it retains and...

Question:

Brandtly Industries invests a large sum of money in R&D; as a result, it retains and reinvests all of its earnings. In other words, Brandtly does not pay any dividends, and it has no plans to pay dividends in the near future. A major pension fund is interested in purchasing Brandtly's stock. The pension fund manager has estimated Brandtly's free cash flows for the next 4 years as follows: $4 million, $5 million, $8 million, and $14 million. After the fourth year, free cash flow is projected to grow at a constant 5%. Brandtly's WACC is 9%, the market value of its debt and preferred stock totals $62 million; and it has 24 million shares of common stock outstanding. Write out your answers completely. For example, 13 million should be entered as 13,000,000.

What is the present value of the free cash flows projected during the next 4 years? Round your answer to the nearest cent. Do not round your intermediate calculations. $

What is the firm's horizon, or continuing, value? Round your answer to the nearest cent. $

What is the firm's total value today? Round your answer to the nearest cent. Do not round your intermediate calculations. $

What is an estimate of Brandtly's price per share? Round your answer to the nearest cent. Do not round your intermediate calculations. $


Answers

2 Free cash flows pv @ 9% $4,000,000 0.91743 $5,000,000 0.84168 $8,000,000 0.77218 $14,000,000 0.70843 $367,500,000 (14000000

.

Similar Solved Questions

1 answer
II Review a tla + This pedigree shows the inheritance pattern of a recessive maternal effect...
II Review a tla + This pedigree shows the inheritance pattern of a recessive maternal effect gene in Drosophila. In maternal effect, the offspring's phenotype is under the control of nuclear gene products present in the mother's egg. In this example, the presence of the a + allele in the mot...
1 answer
Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant...
Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant and the purchase of the equipment necessary to produce the diet drink will cost $23.00 million. The plant and equipment will be depreciated over 10 years to a book value of $1.00 million, and sold for that a...
1 answer
Maggie Symes, age 52, inherited Andie’s Tavern from her father 30 years ago (it has been in her family since 1870). Magg...
Maggie Symes, age 52, inherited Andie’s Tavern from her father 30 years ago (it has been in her family since 1870). Maggie manages the bar and grill alone, since her husband died 2 years ago. She also takes care of her 4-year-old twin granddaughters during the day while the tavern is closed. T...
1 answer
Calculate the three currents shown in the diagram.
Calculate the three currents shown in the diagram....
1 answer
(1 point) Find the solution of y" – 4y + 4y = 16 % with y(0)...
(1 point) Find the solution of y" – 4y + 4y = 16 % with y(0) = 1 and y (0) = 3. y =...
1 answer
How do we write those fractions into decimal fraction, which continue endlessly?
How do we write those fractions into decimal fraction, which continue endlessly?...
1 answer
TLIosed Book A.I Clearly describe the physical meaning, and the no limitation of this equation? ation...
TLIosed Book A.I Clearly describe the physical meaning, and the no limitation of this equation? ation of the equation below, with asketch, What is the 3 P...
1 answer
Esquire Company needs to acquire a molding machine to be used in its manufacturing process. Two...
Esquire Company needs to acquire a molding machine to be used in its manufacturing process. Two types of machines that would be appropriate are presently on the market. The company has determined the following: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate fa...
1 answer
Background pertinent to this problem is available in Interactive LearningWare 18.3. A uniform electric field exists...
Background pertinent to this problem is available in Interactive LearningWare 18.3. A uniform electric field exists everywhere in the x, y plane. This electric field has a magnitude of 5600 N/C and is directed in the positive x direction. A point charge -8.9 × 10-9 C is placed at the origin. F...
1 answer
What are the differences between hydraulic and hydrologic routing and gives examples? Please show answers clearly...
what are the differences between hydraulic and hydrologic routing and gives examples? Please show answers clearly and use easy words to understand. Thanks....
1 answer
2) [40 pts] Extension Spring Design A hard-drawn spring steel extension spring is to be designed...
2) [40 pts] Extension Spring Design A hard-drawn spring steel extension spring is to be designed to carry a static load F of 18 lbf with an extension of 1/2 in using a design factor of n = 1.5 in bending. Use full-coil end hooks with the fullest bend radius of r = D/2 and r2 = 2d. The free length mu...
1 answer
Please explain each step carefully. I. Let μ and v be sigmafinite measures on the measurable...
Please explain each step carefully. I. Let μ and v be sigmafinite measures on the measurable space (X,M). Suppose v << μ and let f be a nonnegative M-measurable function on X. Prove [du...
1 answer
238 1 2. (2 pts) Determine the missing product X m the nuclear reaction 92 U...
238 1 2. (2 pts) Determine the missing product X m the nuclear reaction 92 U + on → X + 2....