Question
Choose a company from Yahoo Finance. Then make the following assumptions: The companys 10% coupon non-callable bonds with 9 years to maturity are selling 12%
Choose a company from Yahoo Finance. Then make the following assumptions: The companys 10% coupon non-callable bonds with 9 years to maturity are selling 12% above par, the risk free rate is 5%, market risk premium is 6%, stock beta is 1.5 and the company has no preferred stock. With a free cash flow (FCF) of 100 million currency units and a constant FCF growth rate of 5%, what would be your estimate of the total value of this company? If the number of outstanding shares is 25 million, what would be your estimate of the stock price? Finally, what is your estimate of the total value of the companys debt? (All numbers are in the same currency units) (assue that the company's capital structure includes debt and common stock only (no preffered stock))
please use Apple's stock info.
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