Question
***PLEASE PROVIDE THE FORMULA IN EACH PART An analyst is following Games Toddlers Inc. and has compiled the following data in preparation for further analysis
***PLEASE PROVIDE THE FORMULA IN EACH PART
An analyst is following Games Toddlers Inc. and has compiled the following data in preparation for further analysis and valuation of the company. Data are in hundreds of millions of
Security type Market value Before tax required returns
Security type | Market value | Before tax required returns |
Preferred equity | 200 | 7.0% |
Bonds | 600 | 7.5% |
Common Stocks | 700 | 14.0% |
Total | 1500 |
Bonds are trading at par
Net income available to common 125
Preferred share dividend 14
Investment in working capital 30
Investment in fixed capital 100
New net borrowing 40
Depreciation 50
Tax rate 40%
Long term growth of FCFF 4%
Long term growth of FCFE 4%
- Compute WACC
- Compute the current FCFF of the company
- Compute the value of the company
- Compute the value of equity
- Compute the current value of FCFE
- Compute the value of equit
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