Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

i need help with this please asap Amarindo, Inc (AMR), is a newly public firm with 10.0 million shares outstanding. You are doing a valuation

i need help with this please asap image text in transcribed
Amarindo, Inc (AMR), is a newly public firm with 10.0 million shares outstanding. You are doing a valuation analysis of AMR. You estimate its free cash flow in the coming year to be S15 12 milion, and you expect the im s free cash lo slo grow by 44% per year in subsequent years Because the firm has only been listed on the stock exchange for a short time, you do not have an accurate assessment of AMR's equity beta. H industryAMR has a much lower debt equity ratio of 0.27, which is expected to remain stable, and its debt is risk tee AMRs corporate tax rate is 32%, the risk-free rate is 49%, and the expected return on the market portfolio is 10.5%. a. Estimate AMR's equity cost of capital b. Estimate AMR's share price owever, you do have beta data for UAL, another firm in the same The equity cost of capital is % (Round tot Ciok on the icon located on the top-right comer of the data table below in order to copy its Equity Beta 1.35 Debt-Equity Ratio 5 Debt Beta 0 27 UAL 0.9 Print Done 1

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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

The Investment Code Ancient Jewish Wisdom For The Wise Investor

Authors: H. W. Charles

1st Edition

1533423466, 978-1533423467

More Books

Students also viewed these Finance questions