Question
Good Times Inc. has current sales of $7,500 (in millions), an operating ratio of 6%, a capital requirement ratio of 40%, a tax rate of
Good Times Inc. has current sales of $7,500 (in millions), an operating ratio of 6%, a capital requirement ratio of 40%, a tax rate of 40% and a corporate cost of capital of 8%. Under new management sales are expected to grow 15% in Yr 1, 15% in Yr 2, 10% in Yr 3, 5% in Yr 4 and then grow at a constant rate of 4% after Yr 4. In addition, the firm has the following balance sheet items: (000,000) Short-term investments = $25 Short-term debt (notes payable) = $250 Long-term debt (bonds) = $300 Preferred stock = $30 Number of shares of common stock = 75
What is the firm's free cash flow at the end of Yr 1?
Group of answer choices
$34.77
$128.96
$72.00
$81.00
$67.50
What is the firms horizon value at the end of Yr 4?
Group of answer choices
$8,326.23
$14,637.70
$9,035.50
$12,198.08
$13,011.28
What is the firms total value today?
Group of answer choices
$9,669.57
$10,312.54
$11,228.96
$12,308.94
$11,598.48
What is the firms current equity value of price per share?
Group of answer choices
$146.91
$121.19
$115.85
$129.77
$150.26
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