Thursday

July 24, 2014

July 24, 2014

Posted by **Yinka** on Thursday, November 15, 2012 at 10:19am.

- STOCKS & BONDS -
**NAINIAVI@GMAIL**, Saturday, November 17, 2012 at 6:57amGrowth rate after 4 years = 7%

Cash flow for year 5 = $15,000,000*1.07 = $16,050,000

WACC = 12%

Value of free cash flows after year 4 at the end of 4 = $16,050,000 / (0.12-0.07)

= $16,050,000 / 0.05

= $321,000,000

Free cash flow for year 4 = $15,000,000+321,000,000 = $336,000,000

Year 1 2 3 4

Total free cash flow $3,000,000 $6,000,000 $10,000,000 $336,000,000

PVIF12% 0.8929 0.7972 0.7118 0.6355

PV of free cash flow $2,678,571 $4,783,163 $7,117,802 $213,534,074

PV $228,113,612

Enterprise value = Market capitalization - Cash and equivalents + Debt + Preferred stock

= $228,113,612 + 60,000,000 = $288,113,612

**Related Questions**

accounting - Mr. and Mrs. Garcia have a total of $ 100,000 to be invested in ...

buisness finance - Series Average return Standard Deviation Large-company ...

algebra 2 - Suppose that you have received an unexpected inheritance of $36,000...

Math - formulate but do not solve the linear programming problem. Tracy has at ...

literature - what were elizabeth barrett brownings poems about

Literature - What is te structure of Elizabeth Barrett Browning's Sonnet 38?

math - Sally invests some money at 65%/a compounded annually. After 5 years . ...

math - Sally invests some money at 65/a compounded annually. After 5 years . she...

math - I have a question and I have read and read and cant comprend how to ...

math - Sally invests some money at 6%/a compounded annually. After 5 years, she ...