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Please show work. I do not understand these from the notes. This homework is not making any sense to me please help assume 5 years
Please show work. I do not understand these from the notes. This homework is not making any sense to me please help
assume 5 years for DDM and DCF questions
Instructions: Write the answers in the blanks provided or in the spaces below each question. You may expand the spaces for more space, but your answers must be hand-written. You may attach or include additional pages with your work but keep everything in order. You may check your answers using my Excel spreadsheet that I have provided. However, you must show me all of your calculations by hand like I did in the class lecture. Approximate time = 10 minutes per question. Use the information below for OnFire, Inc. (LIT) to solve the next five problems (3 points each). GIVEN WACC Beta 1.05 Market Return = 10.50% Risk Free Rate = Weight of Debt - Weight of Equity = 85% After-Tax Cost of Debt - 1% 15% 3% $2.20/share 3% PDM Dividend/Share in Year One = D(1) = Terminal Gr = Interim Gr= Blended Weight 5% 20% DCF Free Cash Flow in year One = FCF(1) = Terminal Gr - Interim Gr= Total Debt = Cash & Cash Eq. = Shares Outstanding - Blended Weight $3,000 3% 7% $12,000 $4,000 1200 60% P/E Next Year EPS = Current P/E - Blended Weight $0.74/share 42 20% 46. What is LIT's Weighted Average Cost of Capital (WACC)? 47. What is LIT's current target price using the dividend discount model (DDM)? 48. What is LIT's current target price using the discounted cash flow model (DCF)? 49. What is LIT's current target price using price-to-earnings multiple (P/E)? 50. What is LIT's blended current target price? Instructions: Write the answers in the blanks provided or in the spaces below each question. You may expand the spaces for more space, but your answers must be hand-written. You may attach or include additional pages with your work but keep everything in order. You may check your answers using my Excel spreadsheet that I have provided. However, you must show me all of your calculations by hand like I did in the class lecture. Approximate time = 10 minutes per question. Use the information below for OnFire, Inc. (LIT) to solve the next five problems (3 points each). GIVEN WACC Beta 1.05 Market Return = 10.50% Risk Free Rate = Weight of Debt - Weight of Equity = 85% After-Tax Cost of Debt - 1% 15% 3% $2.20/share 3% PDM Dividend/Share in Year One = D(1) = Terminal Gr = Interim Gr= Blended Weight 5% 20% DCF Free Cash Flow in year One = FCF(1) = Terminal Gr - Interim Gr= Total Debt = Cash & Cash Eq. = Shares Outstanding - Blended Weight $3,000 3% 7% $12,000 $4,000 1200 60% P/E Next Year EPS = Current P/E - Blended Weight $0.74/share 42 20% 46. What is LIT's Weighted Average Cost of Capital (WACC)? 47. What is LIT's current target price using the dividend discount model (DDM)? 48. What is LIT's current target price using the discounted cash flow model (DCF)? 49. What is LIT's current target price using price-to-earnings multiple (P/E)? 50. What is LIT's blended current target priceStep by Step Solution
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