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You are given the following information for Huntington Power Company. Assume the company's tax rate is 15 percent. The firm has sales in the
You are given the following information for Huntington Power Company. Assume the company's tax rate is 15 percent. The firm has sales in the most recent year of $800M, and EBIT of $300M. The firm also had capital expenditures of $120M and depreciation expense of $90M. The required level of working capital is 8% of sales. The firm expects growth of 10% per year over the next 4 years, after which the growth rate will drop to 3% per year forever Debt 2000,000 6.1 percent coupon bonds outstanding, $1,000 par value, 15 years to maturity, selling for 90 percent of par; the bonds make semiannual payments. The firm has common stock of 100 MM shares outstanding trading at $15 The risk free rate is 3.5% and the expected market return is 10.5%. The Beta of the stock is 1.3 What is the company's WACC? What is the Intrinsic Value of the Stock? If the Corp tomorrow makes a public tender offer at $ 20 / share? As a minority investor what would be your decision & why?
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