Pearl Corp. is expected to have an EBIT of $1,900,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $160,000, $80,000, and $120,000, respectively. All are expected to grow at 15 percent per year for four years. The company currently has $10,000,000 in debt and 800,000 shares outstanding. At Year 5, you believe that the company's sales will be $13,620,000 and the appropriate price-sales ratio is 2.1. The company’s WACC is 8.4 percent and the tax rate is 21 percent. What is the price per share of the company's stock?
Q: Gonzales Corportation generated free cash flow of $86 million this year. For the next two years,…
A: Value of the firm = PV of all the future free cash flows the firm can generate Let Ci represent the…
Q: Power Development Incorporation is expecting earnings before interest and taxes of P2 million for…
A: Given that ; EBIT:$2,000,000 Less: Interest : ($5,000,000*10%) 500,000 Earning before Tax :…
Q: Blue Co. has a capital structure that consists of 25% equity and 75% liabilities. The company…
A: Given information, Capital structure consists of 25% equity and 75% liabilities. Net income…
Q: Power Development Incorporation is expecting earnings before interest and taxes of P2 million for…
A: In residual dividend theory, the dividend paid by the firm should be view as residual. The dividend…
Q: Marshall Law firm expects to generate free-cash flows of $200,000 per year for the next five years.…
A: Given information: Cash flows generated amounted to $200,000 for 5 years Growth rate is 5% WACC is…
Q: Dahlia Colby, CFO of Charming Florist Ltd., has created the firm’s pro forma balance sheet for the…
A: Proforma balance sheet is the estimated or projected balance sheet for future period of time.
Q: You have been given information on the cash flows for the next three years for AMG inc., a…
A: Expected Growth EBIT =Reinvestment Rate ×Return on capitalGiven: EBIT (1-t) in Year 3=$121Growth…
Q: A firm expects to generate $100 million in free cash flow in a year. This free cash flow is…
A: Calculation of the worth of the firm’s common stock is shown: Hence, the value of common stock is…
Q: Halliford Corporation expects to have earnings this coming year of $2.87 per share. Halliford plans…
A: In this we have to use constant growth model to calculate the price of stock.
Q: Petry Corp. is a growing company with sales of $1.25 million this year. The firm expects to grow at…
A: The question is based on the concept of constant annual growth in sales. The future sale will be…
Q: The Podrasky Corporation is considering a $250 million expansion (capital expenditure) program next…
A: Solution: Introduction: A cash flow statement is one of the financial statements of a business…
Q: The Danville Company is considering a $50 million expansion (capital expenditure) program next year.…
A: Solution:- Calculation of approximately how much additional financing will be needed if the…
Q: Halliford Corporation expects to have earnings this coming year of $3.32 per share. Halliford plans…
A: Stock price = sum of present value of expected dividend + present value of terminal value terminal…
Q: A company is forecasted to generate free cash flows of $64 million for the next three years. After…
A: Free cash flow valuation model for value of equity consider the present value of all future cash…
Q: erea Resources is planning a $75 million capital expenditure program for the coming year. Next year,…
A: Any form of business capital received from the outside of the organisation is referred to as…
Q: The Seattle corporation has been presented with an investment opportunity that will yield cash flow…
A: Payback period is a method of evaluating project. It shows time period under which cost of the…
Q: pected to generate net income of $40 million next year and will pay $20 in after tax interest…
A: The current value of a future sum of money or stream of cash flows, given a specified rate of…
Q: Power Development Incorporation is expecting earnings before interest and taxes of P2 million for…
A: Here details related with the calculation of project and its arrangement of fund for both debt and…
Q: The current value of a company is $25 million. if the value of the company six years ago was $10…
A: The average annual rate of return is the estimated return earned on the investment over the period…
Q: MacJolly Corporation is expecting a cash flow of P3,000,000 next year and it is expected to…
A: The value of the company refers to the present value of free cash flows that are expected to be…
Q: Pearl Corp. is expected to have an EBIT of $2,400,000 next year. Depreciation, the increase in net…
A: Let us first calculate the firm value of Pearl Corp. The firm value is equal to sum of the present…
Q: A company has annual after-tax operating cash flows of P2,000,000 per year which are expected to…
A: After-tax operating cash flows = P 2,000,000 After tax WACC = 8%
Q: VWX Inc., has sales of $500,000, net income of $80,000, dividend payout of 50%, total assets of…
A: Sales are $500,000 Net income is $80,000. Dividend payout ratio is 50%. Total assets are $700,000…
Q: Lightbridge corporation has 500,000 shares of common stock that currently trade for $40 per share.…
A: Price to earnings ratio (PE ratio) compares the price with earnings per share. It will be calculated…
Q: The excel Machinery has the current capital structure of 65% equity and 35% debt. Its net income in…
A: Dividend refers to that portion of the profits which is distributed among the shareholders as a…
Q: ardial GreenLights, a manufacturer of energy-efficient lighting solutions, has had such success with…
A: In finance external equity refers to the funds that a company has to obtain from outside the company…
Q: Sora Industries has 65 million outstanding shares, $127 million in debt, $59 million in cash, and…
A: Free cash flow firm value model Under free cash flow valuation, the value of the firm is the sum of…
Q: Galeshouse Gas Stations, Inc ., expects to increase from $1,500,000 to $1,700,000 nect year. Mr.…
A: Solution:- Introduction:- The following information given in the problem as follows:- Expected…
Q: The Giant Machinery has the current capital structure of 65% equity and 35% debt. Its net income in…
A: As per Residual Dividend Payout: Capital structure = 65% equity and 35% debt (given) Investment to…
Q: Kendra Brown is analyzing the capital requirements for Reynolds Corporation for next year. Kendra…
A: a. Investment = $15 million Proportion of equity = $15 million * 70% = $10.5 million Proportion of…
Q: Kendra Brown is analyzing the capital requirements for Reynolds Corporation for next year. Kendra…
A: Hi There, Thanks for posting question. But, As per our honor code, We must answer the first three…
Q: Gardial GreenLights, a manufacturer of energy-efficient lighting solutions,has had such success with…
A: The fund that a company raises by issuing equity shares for the business operations is term as…
Q: The Podrasky Corporation is considering a $250 million expansion (capital expenditure) program next…
A: There are two sources from which a company can obtain the required amount. The first source is the…
Q: A start-up company expects to spend $100,000 the first year for advertising, with amounts decreasing…
A: Equivalent annual worth is the annual worth of all the cash flows received/ paid during a project.…
Q: Dewey Corp. is expected to have an EBIT of $2,850,000 next year. Depreciation, the increase in net…
A: Company's stock :- A stock (also referred to as equity) is a type of security that represents…
Q: Dahlia Colby, CFO of Charming Florist Ltd., has created the firm's pro forma balance sheet for the…
A: The next year's sales are $330 million which has grown by 20 percent. So, the current year's sales…
Q: Kendra Brown is analyzing the capital requirements for Reynolds Corporation for next year. Kendra…
A: Hi, thanks for the question. As per honor code, question with multiple sub parts, will be answered…
Q: Berea Resources is planning a $75 million capital expenditure program for the coming year. Next…
A: A cash flow statement is a statement that is prepared to know the cash position of the company.
Q: Cheryl Colby, CFO of Charming Florist Ltd., has created the firm’s pro forma balance sheet for the…
A: Balance sheet indicates the financial position of the business entity in the market related to a…
Q: Lohn Corporation is expected to pay the following dividends over the next four years: $10, $7, $5,…
A: A model that helps to evaluate the value of the stock by discounting the dividend earned on the…
Q: Banco Industries expect sales to grow at a rapid rate over the next three years, but settle to án…
A: The stock price at the start of year 1 can be calculated as follows: Calculate the terminal value…
Q: Acme Inc. had net profits of $1,000,000 last year, has 100,000 shares outstanding and has maintained…
A: Net profit = $ 1,000,000 Number of shares = 100,000 Earning per share = 1,000,000/100,000 = $ 10…
Q: The Link Resport & Spa Company has 75,000 shares of stock outstanding. The company is expected to…
A: Please note that we have solved the first question. Please resubmit the other questions separately.…
Q: CorpCo is a large manufacturing firm with many stockholders. The firm is considering investing…
A: Given:
Pearl Corp. is expected to have an EBIT of $1,900,000 next year. |
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
- Pearl Corp. is expected to have an EBIT of $2,000,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $160,000, $85,000, and $125,000, respectively. All are expected to grow at 16 percent per year for four years. The company currently has $10,500,000 in debt and 850,000 shares outstanding. At Year 5, you believe that the company's sales will be $14,850,000 and the appropriate price-sales ratio is 2.2. The company’s WACC is 8.5 percent and the tax rate is 22 percent. What is the price per share of the company's stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)Derry Corporation is expected to have an EBIT of $1,900,000 next year. Increases in depreciation, the increase in net working capital, and capital spending are expected to be $160,000, $80,000, and $120,000, respectively. All are expected to grow at 15 percent per year for four years. The company currently has $10,000,000 in debt and 800,000 shares outstanding. At Year 5, you believe that the company's sales will be $13,620,000 and the appropriate price-sales ratio is 2.1. The company's WACC is 8.4. percent and the tax rate is 21 percent. What is the price per share of the company's stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Share priceDerry Corporation is expected to have an EBIT of $2,300,000 next year. Increases in depreciation, the increase in net working capital, and capital spending are expected to be $160,000, $100,000, and $140,000, respectively. All are expected to grow at 19 percent per year for four years. The company currently has $12,000,000 in debt and 1,000,000 shares outstanding. At Year 5, you believe that the company's sales will be $18,910,000 and the appropriate price-sales ratio is 2.5. The company’s WACC is 8.8 percent and the tax rate is 25 percent. What is the price per share of the company's stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. Share price $26.94selected answer incorrect
- Derry Corporation is expected to have an EBIT of $3,100,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $245,000, $150,000, and $250,000, respectively. All are expected to grow at 15 percent per year for four years. The company currently has $19,500,000 in debt and 860,000 shares outstanding. At Year 5, you believe that the company's sales will be $28,700,000 and the appropriate price-sales ratio is 3.4. The company's WACC is 9.7 percent and the tax rate is 23 percent. What is the price per share of the company's stock? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Share priceDerry Corporation is expected to have an EBIT of $2,950,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $230,000, $135,000, and $235,000, respectively. All are expected to grow at 18 percent per year for four years. The company currently has $18,000,000 in debt and 845,000 shares outstanding. At Year 5, you believe that the company's sales will be $28,400,000 and the appropriate price-sales ratio is 3.1. The company’s WACC is 9.4 percent and the tax rate is 25 percent. What is the price per share of the company's stock? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.Pearl Corp. is expected to have an EBIT of $2,900,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $160,000, $130,000, and $170,000, respectively. All are expected to grow at 19 percent per year for four years. The company currently has $15,000,000 in debt and 1,300,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3 percent indefinitely. The company’s WACC is 8.5 percent and the tax rate is 21 percent. What is the price per share of the company's stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
- Derry Corporation is expected to have an EBIT of $2,600,000 next year. Increases in depreciation, the increase in net working capital, and capital spending are expected to be $160,000, $115,000, and $155,000, respectively. All are expected to grow at 16 percent per year for four years. The company currently has $13,500,000 in debt and 1,150,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3 percent indefinitely. The company's WACC is 9.2 percent and the tax rate is 23 percent. What is the price per share of the company's stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. Share price $ 41.86Derry Corporation is expected to have an EBIT of $3,300,000 next year. Increases in depreciation, the increase in net working capital, and capital spending are expected to be $160,000, $150,000, and $190,000, respectively. All are expected to grow at 17 percent per year for four years. The company currently has $17,000,000 in debt and 1,500,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3.5 percent indefinitely. The company’s WACC is 8.9 percent and the tax rate is 25 percent. What is the price per share of the company's stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Please avoid answers in images thank youDerry Corporation is expected to have an EBIT of $3,400,000 next year. Increases in depreciation, the increase in net working capital, and capital spending are expected to be $160,000, $155,000, and $195,000, respectively. All are expected to grow at 18 percent per year for four years. The company currently has $17,500,000 in debt and 1,350,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 2.5 percent indefinitely. The company's WACC is 9.1 percent and the tax rate is 21 percent. What is the price per share of the company's stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Share price
- Derry Corporation is expected to have an EBIT of $3,100,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $245,000, $150,000, and $250,000, respectively. All are expected to grow at 15 percent per year for four years. The company currently has $19,500,000 in debt and 860,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3.4 percent, indefinitely. The company's WACC is 9.7 percent and the tax rate is 23 percent. What is the price per share of the company's stock? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Share priceDerry Corporation is expected to have an EBIT of $21 million next year. Increases in depreciation, the increase in net working capital, and capital spending are expected to be $165,000, $80,000, and $120,000, respectively. All are expected to grow at 18 percent per year for four years. The company currently has $10.4 million in debt and 750,000 shares outstanding. You believe that in Year 5 sales will be $23.7 million and the appropriate price-sales ratio is 2.9. The company's WACC is 8.5 percent and the tax rate is 21 percent. What is the price per share of the company's stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Share priceDerry Corporation is expected to have an EBIT of $2,600,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $195,000, $100,000, and $200,000, respectively. All are expected to grow at 17 percent per year for four years. The company currently has $14,500,000 in debt and 810,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 2.3 percent, indefinitely. The company’s WACC is 8.6 percent and the tax rate is 23 percent. What is the price per share of the company's stock? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.