Candyland has a net income of $700,000, depreciation expense of $200,000, and capital expenditures of $150,000. Candyland
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- Candyland has a net income of $700,000, depreciation expense of $200,000, and capital expenditures of $150,000. Candyland has an expected constant growth rate in FCF of 2.1%, and an average tax rate of 42%. Assume the company has a debt-to-equity ratio of 0.25 (with $2 million in debt); the current equity beta is 1.16; the risk-free rate is 2%; and the market risk premium is 3.3%.
- Determine Candyland's net equity value. Round asset beta to three decimals, discount rate to two decimals in percentage, and net equity value to the nearest dollar.
Related Book For
Fundamentals Of Investments Valuation And Management
ISBN: 9781266824012
10th Edition
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
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