Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

S or 11. More on the corporate valuation model Widget Corp. is expected to generate a free cash flow (FCF) of $10,680.00 million this year

S or 11. More on the corporate valuation model Widget Corp. is expected to generate a free cash flow (FCF) of $10,680.00 million this year (FCF= $10,680.00 million), and the FCF is expected to grow at a rate of 21.40% over the following two years (FCF and FCFs). After the third year, however, the FCF is expected to grow at a constant rate of 2.82% per year, which will last forever (FCF.). Assume the firm has no nonoperating assets. If Widget Corp.'s weighted average cost of capital (WACC) is 8.46%, what is the current total firm value of Widget Corp.? (Note: Round all intermediate calculations to two decimal places.) O $258,109.96 million O $320,155.95 million O $33,205.42 million $309,731.95 million Widget Corp.'s debt has a market value of $193,582 million, and Widget Corp. has no preferred stock. If Widget Corp. has 450 million shares of common stock outstanding, what is Widget Corp.'s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.) O $142.40 $430.18 O $157.74 O $143.40 Grade It Now Save & Continue Continue without saving
image text in transcribed
11. More on the corporate valuation model Widget Corp. is expected to generate a free cash flow (rCF) of $10,680.00 million this year (FCF, =$10,680.00million ), and the FCF is expected to urow at a rate of 21.40% over the following two yoars (FCF, and FC, ). Nher the third yoar, however, the FCF is expected to grow at a constant rate of 2.8296 per year, which will last forever (FCF-). Assume the firm has no nonoperating assets, If Widget Corp.'s weighted average cost ef capita! (WacC) is 4.46%, what is the current total firm value of Widoet Cerp.? (Note: flocind all intermediate calculations to two dedinal places.) $258,109,96 million $320,155.95 mition 53,205,42 mition $309,731.95 mition Widget Corpis debt has a maket value of $193,582 millon, and Widoet Corp, has no prefered stock. If widget cerp. has 450 million shares of two decinal places.) $142.40 3430.15 $157,74 $143.40

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

More Books

Students also viewed these Accounting questions

Question

Add delivery cues and reminders to your final speaking notes.

Answered: 1 week ago

Question

Describe the seven standard parts of a letter.

Answered: 1 week ago

Question

Explain how to develop effective Internet-based messages.

Answered: 1 week ago

Question

Identify the advantages and disadvantages of written messages.

Answered: 1 week ago