Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please answer in Excel with all the steps and show work You estimate the cash flow of the firm to be 1.4 million in 2023
Please answer in Excel with all the steps and show work
You estimate the cash flow of the firm to be 1.4 million in 2023 . WACC is 15%. Firm has 500,000 in cash and no debt and 1 million shares outstanding. A) Assume that this cash flow will increase at 5% long-term and calculate the equity value per share. B) Continue with the assumptions in A. Set up set up a 2-way data table varying WACC and initial cash flow to show the effect these changes have on the equity value per share. Assume range of cash flows between 800,000 and 2,000,000 and WACC between 10% and 20% (you pick a reasonable interval). Format it so it doesn't have any not meaningful findings. C) Now assume that this cash flow will increase at 10% for 7 years and after that will grow at 3% long-term and calculate equity per share. DO NOT USE MID-YEAR DISCOUNTING. You estimate the cash flow of the firm to be 1.4 million in 2023 . WACC is 15%. Firm has 500,000 in cash and no debt and 1 million shares outstanding. A) Assume that this cash flow will increase at 5% long-term and calculate the equity value per share. B) Continue with the assumptions in A. Set up set up a 2-way data table varying WACC and initial cash flow to show the effect these changes have on the equity value per share. Assume range of cash flows between 800,000 and 2,000,000 and WACC between 10% and 20% (you pick a reasonable interval). Format it so it doesn't have any not meaningful findings. C) Now assume that this cash flow will increase at 10% for 7 years and after that will grow at 3% long-term and calculate equity per share. DO NOT USE MID-YEAR DISCOUNTINGStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started