Question
BBQ Corporation's latest free cash flow (FCF0) was $22.00 million. The growth rate in FCFs is assumed to be constant at the rate of 2%
BBQ Corporation's latest free cash flow (FCF0) was $22.00 million. The growth rate in FCFs is assumed to be constant at the rate of 2% a year for future periods. BBQ has 30 million shares of common stock outstanding and $130 million of long-term debt, including preferred stock. The WACC of the corporation is 8%. What is the value of the entire corporation? What is BBQ's common stock value?
What is the BBQ's estimated price per share?
What is the value of the entire company ?
What is the value of the common stock value is ?
10-year, $1000 par value bond has an 11.00% annual coupon. The bond currently sells for $1175. If the yield to maturity remains at its current rate, what will the price be 4 years from now? State whether it is a discount or premium bond?
You have been assigned to calculate the weighted average cost of capital (WACC) of PPT corporation. The target capital structure of PPT is 40.00% debt and the remaining is common equity. PPT's bonds have a yield of 12.35%. The corporation paid dividend of $3.20 and the future dividends are expected to grow at a constant rate of 5.00%. The current market price per share of common stock is $23.50. The flotation costs are 8.00% of price per share. The tax bracket is 45.00%. Calculate the WACC when the corporation is to finance its investments through a new stock issue.
MMN Corporation's beta is calculated 1.95. The corporation paid $2.15 dividend last year. The growth rate in MMN's earnings and dividends is estimated 15.00% for the next 5 years, after which the growth rate will be 4.00%. The risk-free rate of return is 8.00%, and MMN's management estimates that the market return is 16.00%. Calculate the current common stock price of the corporation.
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