Question
Dan Co. recently had FCFE of $110 Million. Company had 50,000 Bonds outstanding trading @ par with a Coupon Rate of 7%. Capital Expenditure &
Dan Co. recently had FCFE of $110 Million. Company had 50,000 Bonds outstanding trading @ par with a Coupon Rate of 7%. Capital Expenditure & Change in Working Capital during the year were 14 Million & 4 Million, respectively. Company had Depreciation & Amortization charges of 2 Million & 0.5 Million, Respectively. Zin Co. has a tax rate of 30% with Cost of equity of 11% & WACC equivalent to 10%. No debt outstanding was paid during the year. Although, company issued new bonds worth of 1 million. Company has 400,000 shares of preferred stock outstanding with a par of $120 & dividend rate of 5%. Company is expected to grow at a constant rate of 5% forever. With the given information, calculate Value of the firm & intrinsic value per share using FCFF Model assuming 1 million Common Stock shares outstanding.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started