Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

SA Aeronautics just announced that it won a 5 year defence contract. The company expects its free cash flow to increase by 30 million of

SA Aeronautics just announced that it won a 5 year defence contract. The company expects its free cash flow to increase by 30 million of each of the next 5 years becouse of this contract. S.A aeronautics has 20 million shares outstanding , no debt and an equity cost of capital of 9%. if this news came a complete surprise to investors, what should happen to SA`s stock price upon the announcement?

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 Finance questions

Question

2. What are the major capabilities of artificial intelligence?

Answered: 1 week ago

Question

using signal flow graph

Answered: 1 week ago