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Please show details how to answer / calculate the following; Question 1 Assume that a client, GeekTech is considering purchasing the software firm, All -
Please show details how to answercalculate the following; Question
Assume that a client, GeekTech is considering purchasing the software firm, AllinOne Solutions. AllinOne Solutions is a software firm with an excellent track record and an established line of software products that is publicly traded. AllinOne Solutions marginal tax rate is and they plowback of their Net Income into the firm with the remaining being distributed to their shareholders as dividends. AllinOne Solutions growth in CFFA is constant at annually. Their dividends grow at the same constant rate and are issued annually. Their current dividend is $ per share.
AllinOne Solutions is financed with both publicly traded equity and corporate debt traded publicly, as well. Their corporate bonds are all traded in $ increments and were issued at annually for years. Currently, one year later, they are trading for $ per bond. Finally, their equity is currently trading at $ per share.
First, you are to create the necessary Balance Sheets and Income Statement for AllinOne Solutions and then calculate their annual Cash Flow from Assets aka: CFFA or Free Cash Flows FCF A constraint here, however, is that your CFFA aka: CFFA must range between $ and $ annually. A concise set of financial statements and calculations are satisfactory here as GeekTech understands how cash flow from assets are calculated at this point.
Second, after calculating AllinOne Solutions CFFA, you are to estimate the value of this publicly traded firm. Make sure to explain the entire process of valuation as well as providing the valuation of the AllinOne Solutions.
Question
AllinOne Solutions management team does not seem to understand when bonds trade at a discount and when bonds trade at a premium. Develop examples and provide illustrations examples of each for them. Said another way, professionally explain these concepts to AllinOne Solutions management team.
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