FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

For a DCF valuation, you find that the present value of FCFs is $100,000, and the present value of the horizon value is $25,000. You

For a DCF valuation, you find that the present value of FCFs is $100,000, and the present value of the horizon value is $25,000. You also determine that the short-term investments is worth $10,000. What is the value of the company (i.e., the estimated total intrinsic value)?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Solution The value of the company or the estimated total intrinsic value can be calculated by summing the present value of free cash flows FCFs the pr... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Foundations of Finance The Logic and Practice of Financial Management

Foundations of Finance The Logic and Practice of Financial Management

Authors: Arthur J. Keown, John D. Martin, J. William Petty

8th edition

132994879, 978-0132994873

More Books

Students also viewed these Finance questions

Question

★★★★★
a. Describe briefly the legal rights and privileges of common stockholders. b. What is free cash flow (FCF)? What is the weighted average cost of capital? What is the free cash flow valuation model?...

Answered: 1 week ago

Question

★★★★★
Your employer, a mid-sized human resources management company, is considering expansion into related fields, including the acquisition of Temp Force Company, an employ mentagency that supplies word...

Answered: 1 week ago

Question

★★★★★
a. Describe briefly the legal rights and privileges of common stockholders. b. Use a pie chart to illustrate the sources that comprise a hypothetical company's total value. Using another pie chart,...

Answered: 1 week ago

Question

★★★★★
George and Weezy received $29,100 of Social Security benefits this year ($11,000 for George: $18,100 for Weezy). They also received $4,800 of Interest from jointly owned City of Ranburne Bonds and...

Answered: 1 week ago

Question

★★★★★
Raymond Dirks worked for a New York City broker-dealer firm. He specialized in analyzing insurance company investments. Dirks received a tip from Ronald Secrist, a former officer of Equity Funding of...

Answered: 1 week ago

Question

★★★★★
Perform the indicated operations. 16xy5 - 8xy + 4 4xy

Answered: 1 week ago

Question

★★★★★
The diameter of a bubble, at the time when it breaks, is a random variable X with density function Find the distribution function of the area E and the volume V of the bubble at the time when it...

Answered: 1 week ago

Question

★★★★★
Ruberstein, Inc. was founded on April 1 and entered into the following transactions: Apr. 1 Issued common stock to shareholders in exchange for cash, $20,000. 1 Purchased a delivery van (equipment),...

Answered: 1 week ago

Question

★★★★★
Examples of errors include all of the following except: Select one: Mathematical errors in inventory counts Ignoring salvage value in calculation depreciation expense Overlooked inventory in physical...

Answered: 1 week ago

Question

★★★★★
Summarize the concept of difference in enforcement of accounting standards: Differences in countries institutional settings have long been recognized in accounting research. Countries have been...

Answered: 1 week ago

Question

★★★★★
Answer: The two wagons of equal mass (300 kg) start from rest under the action of a force of 560 N, neglect friction. They move together for 4.7 s until the connection between them is broken and they...

Answered: 1 week ago

Question

★★★★★
SB (Algo) Calculating Equivalent Units, Cost per Equivalent Unit, Reconciling the Cost of Work in Process [LO 3-2, 3-4] [The following information applies to the questions displayed below.] Silver...

Answered: 1 week ago

Question

★★★★★
What does De Soto mean by "strong, innovative economic markets"? A. These are markets that use existing technology to produce new goods and services. B. These are markets that are profitable for...

Answered: 1 week ago

Question

★★★★★
Using the Federal Rules of Evidence. What would be a given analysis of this scenario? On an open stretch of a two-lane highway in Nevada Jay Gadsby, traveling eastbound in a red Z -car with racing...

Answered: 1 week ago

Question

★★★★★
A hedger is short spot and long futures. Today, spot is 4.40 and the June future is 5.00. A bit later, spot goes to 5.00 and the June future goes to 5.10. What has happened to basis in this period?...

Answered: 1 week ago

Question

★★★★★
The EICAS CRTs (cathode ray tubes) are: Group of answer choices Identical Directly powered from the battery bus Cooled by AC-powered fans All the above Only b and c

Answered: 1 week ago

Question

★★★★★
[30] Q3. write a Matlab code that calculates the first derivative of f(x)-ex at x = 0 using forward differencing. Choose 4x = 0.5 initially and evaluate the absolute error in the derivative by...

Answered: 1 week ago

Question

★★★★★
In Problems 718, write the augmented matrix of the given system of equations. f0.01x0.03y = 0.06 [0.13x + 0.10y = 0.20

Answered: 1 week ago

Question

★★★★★
Blackburn & Smith common stock currently sells for $ 23 per share. The companys executives anticipate a constant growth rate of 10.5 percent and an end- of- year dividend of $ 2.50. a. What is your...

Answered: 1 week ago

Question

★★★★★
Bank of America has bonds that pay a 6.5 percent coupon interest rate and mature in 5 years. If an investor has a 4.3 percent required rate of return, what should she be willing to pay for the bond?...

Answered: 1 week ago

Question

★★★★★
Match the following terms with their definitions: TERMS Opportunity cost Financial policy Cost of capital DEFINITIONS The target mix of sources of funds that the firm uses when ralsing new money to...

Answered: 1 week ago

Question

★★★★★
Linda, age 37, who files as a single taxpayer, had AGI of $280,000 for 2016. She incurred the following expenses and losses during the year: Medical expenses (before the 10%-of-AGI...

Answered: 1 week ago

Question

★★★★★
Cheryl incurred $8,700 of medical expenses in November 2016. On December 5, the clinic where she was treated mailed her the insurance claim form it had prepared for her with a suggestion that she...

Answered: 1 week ago

Question

★★★★★
Paul and Donna Decker are married taxpayers, ages 44 and 42, respectively, who file a joint return for 2016. The Deckers live at 1121 College Avenue, Carmel, IN 46032. Paul is an assistant manager at...

Answered: 1 week ago

Previous Question Next Question