Question
Enterprise Values is 93.05 mil. The firms free cash flow is realized every six months. Six months from now free cash flow will be $2.5
Enterprise Values is 93.05 mil. The firms free cash flow is realized every six months. Six months from now free cash flow will be $2.5 million. After that it is expected to grow in perpetuity every six months at an annualized rate of 2%. CAPM beta is 0.75, the annualized risk free rate of interest is 1.5%, and the annualized expected return on the stock market is 9.5%. Current annual Net Income is $9.8 million, their tax rate is 20%, and their annual interest expense is $1.5 million. They have 60 shares outstanding. Their book value balance sheet is below
Cash 50 AP 20 AR 35 Debt 30 PPE 145 Equity 180 Total assets 230 Liabilities + Equity 230
Find: Market-valued-added to invested capital Market price per share Market-to-book equity ratio ROIC
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