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Please answer all of the problems. Thank you in advance Problem 8-14 Preferred Stock Valuation Several years ago, Rolen Riders issued preferred stock with a
Please answer all of the problems. Thank you in advance
Problem 8-14 Preferred Stock Valuation Several years ago, Rolen Riders issued preferred stock with a stated annual dividend of 12% of its S100 par value. Preferred stock of this type currently yields 6%. Assume dividends are paid annually. a. What is the estimated value of Rolen's preferred stock? Round your answer to the nearest cent. b. Suppose interest rate levels have risen to the point where the preferred stock now yields 11%. what would be the new estimated value of Rolen's preferred stock? Round your answer to the nearest cent. 13. Problem 8-17 Problem Walk-Through Problem 8-17 Value of Operations Kendra Enterprises has never paid a dividend. Free cash fiow is projected to be $80,000 and $100,000 for the next 2 years, respectively; after the second year, FCF is expected to grow at a constant rate of 10%. The company's weighted average cost of capital is 18%. a. What is the terminal, or horizon, value of operations? (Hint: Find the value of all free cash flows beyond Year 2 discounted back to Year 2.) Round your answer to the nearest cent. b. Calculate the value of Kendra's operations. Round your answer to the nearest cent. Round intermediate calculations to two decimal places 14. Problem 8-18 Problem Walk-Through Problem 8-18 Free Cash Flow Valuation Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 6% rate. Dozier's weighted average cost of capital is WACC-14%. Year Free cash flow ($ millions) $20 $30 $40 a. What is Dozier's horizon value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Round your answer to two decimal places. Enter your answer in millions of dollars. million b. What is the current value of operations for Dozier? Round your answer to two decimal places. Round intermediate calculations to two decimal places. Enter your answer in millions of dollars million c. Suppose Dozier has $10 million in marketable securities, $100 million in debt, and 10 million shares of stock. What is the intrinsic price per share? Round your answer to the nearest cent. Round intermediate calculations to two decimal placesStep by Step Solution
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