Question
Stock Valuation. On January 2022, Sunergy Solutions (SS) LLC has just developed a solar panel capable of generating 150% more electricity than any other solar
Stock Valuation.
On January 2022, Sunergy Solutions (SS) LLC has just developed a solar panel capable of generating 150% more electricity than any other solar panel currently on the market. As a result, SS is expected to experience a 10% annual growth rate for the next 5 years. By the end of 5 years (2027), other firms will have developed comparable technologies and RT's growth rate will slow to 5% per year indefinitely. SS financed its new solar panel with debt and equity and its weighted average cost of capital is 12%. SS's most recent free cash flow (FCF) was $1.15 million, and it has 1,000,000 shares outstanding. Find the value of SS's operations as of 2022 and its price per share.
Suppose the actual market price in January 2022 is $41.55, what would be the expected rate of return to investors of Sunergy Solutions LLC stock?
To provide prospective investors of SS's earnings growth potential, develop a forecast of SS's expected price (ceteris paribus) for this next 10 (ten) years staring from today (Po); that is Po to P10.
Estimate the expected annual dividend yields, capital gains yields and the stock annual total returns plus the 10-year average return, its standard deviation (i.e., absolute risk) and coefficient of variation (i.e., relative risk and risk per unit return).
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