CAS Limited has free cash flow of $250,000 that is expected to grow on average at a

Question:

CAS Limited has free cash flow of $250,000 that is expected to grow on average at a 5% rate. The company holds $600,000 of long-term debt, and $80,000 in nonoperating short-term investments. The company has 250,000 shares outstanding and its weighted average cost of capital is 10%. The company does not pay a dividend. Calculate CAS Limited's:

a. value of operations.

b. total company value.

c. value of common equity.

d. stock price.

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of... Free Cash Flow
Free cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Unlike earnings or net income, free cash flow is a measure of profitability that excludes the...

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