QUESTION 8 A financial analyst from Raymond James made the following forecast for Hi-tech Firm TGI between 2013-2015 (in millions of dollars) at the end of 2012. 2013 2014 2015 CFFO 265 320 545 CF Investment 258 196 345 Raymond James expects a constant growth of 8% in Cash Flow from operations after 2015. However, Raymond James is expecting uneven above-average growth in Investments. Specifically, TGI is expected to have an initial six-year period of 9% per year growth after 2015. Analysts anticipates that TGI will increase its investments 5% per year as a mature company, and allows 10 years for the transition to the mature growth period. TGI reported $4,400 in short-term and long-term debt and 750 million shares outstanding at the end of 2012. (WACC=11%). Please estimate the fair share price at the end of 2012. $2.29 $7.52 $9.04 $10.78 $12.51 None of the above QUESTION 15 A financial analyst from Raymond James made the following forecast for Hi-tech Firm TGI between 2013-2015 (in millions of dollars) at the end of 2012. 2013 2014 2015 CFFO 265 320 545 CF Investment 238 196 345 Raymond James expects a constant growth of 8% in Cash Flow from operations after 2015. However, Raymond James is expecting uneven above-average growth in Investments. Specifically, TGI is expected to have an initial six-year period of 9% per year growth after 2015. Analysts anticipates that TGI will increase its investments 5% per year as a mature company, and allows 10 years for the transition to the mature growth period. TGI reported $4,400 in short-term and long-term debt and 450 million shares outstanding at the end of 2012. (WACC=11%). Which of the following options is closest to the present value of free cash flow from 2013 to 2021? $253.19 $753.81 $1,006.99 $1,025.01 $1,251.23 None of the above QUESTION 8 A financial analyst from Raymond James made the following forecast for Hi-tech Firm TGI between 2013-2015 (in millions of dollars) at the end of 2012. 2013 2014 2015 CFFO 265 320 545 CF Investment 258 196 345 Raymond James expects a constant growth of 8% in Cash Flow from operations after 2015. However, Raymond James is expecting uneven above-average growth in Investments. Specifically, TGI is expected to have an initial six-year period of 9% per year growth after 2015. Analysts anticipates that TGI will increase its investments 5% per year as a mature company, and allows 10 years for the transition to the mature growth period. TGI reported $4,400 in short-term and long-term debt and 750 million shares outstanding at the end of 2012. (WACC=11%). Please estimate the fair share price at the end of 2012. $2.29 $7.52 $9.04 $10.78 $12.51 None of the above QUESTION 15 A financial analyst from Raymond James made the following forecast for Hi-tech Firm TGI between 2013-2015 (in millions of dollars) at the end of 2012. 2013 2014 2015 CFFO 265 320 545 CF Investment 238 196 345 Raymond James expects a constant growth of 8% in Cash Flow from operations after 2015. However, Raymond James is expecting uneven above-average growth in Investments. Specifically, TGI is expected to have an initial six-year period of 9% per year growth after 2015. Analysts anticipates that TGI will increase its investments 5% per year as a mature company, and allows 10 years for the transition to the mature growth period. TGI reported $4,400 in short-term and long-term debt and 450 million shares outstanding at the end of 2012. (WACC=11%). Which of the following options is closest to the present value of free cash flow from 2013 to 2021? $253.19 $753.81 $1,006.99 $1,025.01 $1,251.23 None of the above
