Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please show work, thank you 10. Corporate valuation model Aa Aa The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value-added (EVA)

image text in transcribed

please show work, thank you

10. Corporate valuation model Aa Aa The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value-added (EVA) approach are some examples of valuation techniques. The corporate valuation model is similar to the dividend-based valuation that you've done in previous problems, but it focuses on a firm's free cash flows (FCFs) instead of its dividends. Some firms don't pay dividends, or their dividends are difficult to forecast. For that reason, some analysts use the corporate valuation model Blur Corp. has an expected net operating profit after taxes, EBIT1 T), of $4,400 million in the coming year. In addition, the firm is expected to have net capital expenditures of $660 million, and net operating working capita (NOWC) is expected to increase by $30 million. How much free cash flow (FCF) is Blur Corp. expected to generate over the next year? O $89,082 million O $3,710 million $5,030 million O $3,770 million Blur Corp.'s FCFs are expected to grow at a constant rate of 3.54% per year in the future. T Corp.'s outstanding debt is $23,581 million, and preferred stocks' value is $13,100 million. Blur Corp. has 450 million shares of common stock outstanding, and its weighted average cost of capital he market value of Blur (WACC) equals 10.62%. Using the preceding information and the FCF you calculated in the previous question, calculate the appropriate values in this table Term Value (Miltlions) Total firm value Value of common equity Intrinsic value per share [

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

Managing The Audit Function A Corporate Audit Department Procedures Guide

Authors: Michael P. Cangemi

2nd Edition

0471012556, 978-0471012559

More Books

Students also viewed these Finance questions