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Eduardwww [97]
2 years ago
8

Fincorp’s free cash flow to the firm is reported as $205 million. The firm’s interest expense is $22 million. Assume the tax rat

e is 35% and the net debt of the firm increases by $3 million. What is the market value of equity if the fcfe is projected to grow at 3% indefinitely and the cost of equity is 12%?
Business
2 answers:
Brut [27]2 years ago
4 0

Answer:

The market value of equity is $2,152.22

Explanation:

FCFE = 205 - 22*(1 - 35) + 3

         = 193.70

market value = 193.70/(0.12 - 0.03)

                      = $2,152.22

Therefore, The market value of equity is $2,152.22

xxMikexx [17]2 years ago
4 0

Answer:

2152.22 million

Explanation:

The computation of market value equity is given below :-

Free cash flow = $205 million

So,The interest expenses will be calculated

= 22 × (1-35%)

=  22 × 0.65

= -14.3

Net Debt = $3 million

Free cash flow to equity = free cash flow + interest expenses + net debt

= $205 million - 14.3 + $3 million

= $193.7 million

Cost of equity = 12%

Growth = 3%

So the value is (Net Debt) ÷ (cost of equity - growth)

= 2152.22 million

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Rent Versus Buy. Alex Guadet of Nashville, Tennessee

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Explanation:

a) Data and Calculation:

Mortgage amount = $150,000

Principal Reduction         1,700

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2 years ago
Irene invested $27,000 in a twelve-year CD bearing 8.0% interest, but needed to withdraw $6,000 after three years. If the CD’s p
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$5,040 since Irene earned nearly earned about $4,800 less than what she would be making if she did not make her early withdrawal.

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When the first Pizza Hut opened its doors back in 1958, it offered consumers one style of pizza: its Original Thin Crust Pizza.
slega [8]

Answer:

<u>Monopolist competition</u>.

Explanation:

The market structure of monopolistic competition occurs when there are several companies offering similar products, which even though substitute products cannot be considered perfect substitutes. Monopolistic competition is characterized when in the market there are many sellers competing for a higher market position of some product or sector. This type of monopolistic competition is characterized by free entry to other companies, which makes it increasingly competitive in the pursuit of customer preference.

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In this assignment, you will develop a more personalized understanding of the Balanced Scorecard concept and see how your vision
Lynna [10]

Answer:

My four smart goals includes the following: I want to become physically fit within the next 6 months so that I can run a full marathon in less than 4 hours,  want to become a senior manager in my current organization from my current role as a manager within the next 2 years so that I can lead a team of 2-3 managers, I want to become an adorable husband to my wife by spending more time with her and taking her on vacations in the next 12 months, I want to become a lovable dad to my son in the next 4 months so that I can spend more time with him and answer all his queries.

Explanation:

Solution

The following are my 4 SMART goals given below:

1.I want to become a senior manager in my current organization from my current role as a manager within the next 2 years so that I can lead a team of 2-3 managers.

2. I want to become physically fit within the next 6 months so that I can run a full marathon in less than 4 hours.

3. I want to become a lovable dad to my son in the next 4 months so that I can spend more time with him and answer all his queries.

4. I want to become an adorable husband to my wife by spending more time with her and taking her on vacations in the next 12 months,

Measurable :

1. I would start my training from tomorrow. Initially I would run 2 to 5 kilometres with walk breaks.

2. I would start talking to my boss next week to ask for additional responsibilities and also ask him to let me know what needs to be done to get promoted.

3. I would start coming from office early by being more efficient in office. I will take my son on walks or play with him for 1 hour daily.

4. I would come back from office on time and spend time with my wife after spending time with my son.

Attainable/Attainability:

1. I will talk to other marathoners about whether my goal is attainable. I will also research about it.

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3. I will talk to other dads about whether my goal is attainable.

4. I will talk to other husbands who are successful.

Realistic:

Timely:

I have given a time frame for attaining all these goals which is very important.

For implementing these goals, I will use the Plan-Do-Act-Dare cycle.

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1. Vehicles- Focused hard work

2.Differentiation- Being different from others.

3. Arenas-Professional and Personal

4. Staging-Speed of initiatives

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Answer:

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