Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please do part A and B Roybus's free cash fow by $180 milion at the end of this year and by $ es miltion at

Please do part A and B image text in transcribed
Roybus's free cash fow by $180 milion at the end of this year and by $ es miltion at tho end of nert your a. If Roybus has 36 milion shares outstanding and a weighted average cost of capital of 13.32%. What change in Roypurs stock price would you expoct upon thes announcement? (Astume thut the velue of Roybus's debt is not affocted by the event.) b. Would you expect to be able to sell Roybus stock on hearing this announcement and make a profr? Explain. a. If Roybus has 36 mifion shares outstanding and a weighted average cost of capital 13.32%, what change in Roytur's stock price would you expect upon this announcernens? (Mesume that the vilue of Roybus's debt is not aflected by the everst.) The change hi proce per share would be (Plound to the nearest cent)

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

Analysis For Financial Management

Authors: Robert C. Higgins

5th Edition

0256167036, 9780256167030

More Books

Students also viewed these Finance questions

Question

=+1. How can depreciation be a cash flow?

Answered: 1 week ago