Spreadsheet problem

profileMuhammad Hassan

     Q2. A firm's most recent FCF was $2.4 million; the FCF is   expected to grow at a constant rate of 5%. The WACC is 14% and there are 2   million shares outstanding. The firm has $12 million in short-term   investments which it plans to liquidate distribute in a stock repurchase; the   firm has no other financial investments or debt. Verify that the value of   operations is $28 million. Immediately prior to the repurchase, what are the   intrinsic value of equity and the intrinsic stock price? How many shares will   be repurchased? How many shares will remain after the repurchase? Immediately   after the repurchase, what are the intrinsic value of equity and the   intrinsic stock price?    

    • 5 years ago
    • 1
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