Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are analyzing Field Technologies, Inc. From their financial statements and industry research, you have gathered information below. What would you estimate the value

image text in transcribed

You are analyzing Field Technologies, Inc. From their financial statements and industry research, you have gathered information below. What would you estimate the value the common equity shares to be if you expected FCFF to grow 20% for the next 5 years and then 6% thereafter in a perpetuity growth model for FCFF? Answer in price per share to the nearest cent (0.01). Net Income $3,000 million Free Cash Flows to the Firm (last year) $5,500 million Analysts expected growth rate (FCFF) 7.5% per year going forward WACC 12.5% Cost of Equity Capital 22.5% Interest Expense $1,600 million Effective Tax Rate Par value of debt outstanding Market beta 22.0% $45,000 million 1.95 Risk-free rate 1.50% Preferred Equity Shares $5,000 million Minority Interest $2,500 million Additional Paid-In Capital (APIC) $4,500 million Cash and Equivalents $2,000 million Weighted Avg. Diluted Shares 300 million Dividend $4.5 per year Expected growth rate of dividends 3.92%

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

Foundations of Financial Management

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen

15th edition

77861612, 1259194078, 978-0077861612, 978-1259194078

More Books

Students also viewed these Finance questions

Question

3. Distinguish between experimental and non-experimental research.

Answered: 1 week ago