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Can anyone help me to understand this? I'm not understanding the formulas or anything. The maximum price per share that Newman should pay for Grips

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Can anyone help me to understand this? I'm not understanding the formulas or anything.

image text in transcribed The maximum price per share that Newman should pay for Grips is $ The market value of Lawrence's shares is $ Free cash flow valuation Nabor Industries is considering going public but is unsure of a fair offering price for the company. Before hiring an investment banker to assist in making the public offering, managers at Nabor have decided to make their own estimate of the firm's common stock value. The firm's CFO has gathered data for performing the valuation using the free cash flow valuation model.The firm's weighted average cost of capital is 13 %, and it has $ 2,200,000 of debt at market value and $ 440,000of preferred stock at its assumed market value. The estimated free cash flows over the next 5 years, 2016 through 2020, are given in the table, Beyond 2020 to infinity, the firm expects its free cash flow to grow by 4 % annually. The value of Nabor Industries' entire company is $ The value of Nabor Industries' common stock is $ If the firm plans to issue 200,000 shares of common stock, the estimated value per share is $ Book and liquidation valueThe balance sheet for Gallinas Industries is as follows, Additional information with respect to the firm is available: 1. . Preferred stock can be liquidated at book value. 2. Accounts receivable and inventories can be liquidated at 87% of book value. 3. The firm has 10,000 shares of common stock outstanding. 4. All interest and dividends are currently paid up. 5. Land and buildings can be liquidated at 135% of book value. 6. Machinery and equipment can be liquidated at 73% of book value. 7. Cash and marketable securities can be liquidated at book value. a.Gallinas Industries' book value per share is $ . b.Gallinas Industries' liquidation value per share is $ . c. Compare, contrast, and discuss the values found in parts a and A. Liquidation value is below book value per share and represents the maximum value for the firm. It is possible for liquidation value to be greater than book value if assets are overvalued. B. Liquidation value is below book value per share and represents the maximum value for the firm. It is possible for liquidation value to be greater than book value if assets are undervalued. C. Liquidation value is below book value per share and represents the minimum value for the firm. It is possible for liquidation value to be greater than book value if assets are undervalued. D. Liquidation value is greater than book value per share and represents the minimum value for the firm. It is possible for liquidation value to be greater than book value if assets are undervalued. Management action and stock value REH Corporation's most recent dividend was $ 2.83per share, its expected annual rate of dividend growth is 5%, and the required return is now 15%. A variety of proposals are being considered by management to redirect the firm's activities. Determine the impact on share price for each of the following proposed actions. If the firm does nothing that will leave the key financial variables unchanged, the value of the firm will be $ Invest in a new machine that will increase the dividend growth rate to 8% and lower the required return to 11%. Eliminate an unprofitable product line, which will increase the dividend growth rate to 6% and raise the required return to 18 % Merge with another firm, which will reduce the growth rate to 4% and raise the required return to 19%. Acquire a subsidiary operation from another manufacturer. The acquisition should increase the dividend growth rate to 8 % and increase the required return to 18%. Integrativelong -Risk and valuation Giant Enterprises' stock has a required return of 10.3%. The company, which plans to pay a dividend of $2.04 per share in the coming year, anticipates that its future dividends will increase at an annual rate consistent with that experienced over 2009-2015 period, when the following dividends were paid If the risk-free rate is 6%, the risk premium on Giant's stock is ___% Using the constant-growth model, estimate the value of Giant's stock _______ Explain what effect, if any, a decrease in the risk premium would have on the value of Giant's stock ______________

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