Assignment 13
jonknee
assignment_13.xlsxSheet1
| Problem 1 | ||||||
| required rate of return= | 8% | |||||
| Current stock price (Po)=D1/(ke-g) | ||||||
| D1= | 1.5 | |||||
| ke= | 8% | |||||
| g= | ||||||
| 2.604 | ||||||
| dividend yield= | 0.0483870968 | |||||
| 4% | ||||||
| 1.7284477695 | ||||||
| price= | 48.53 | |||||
| Problem 2 | ||||||
| FCF3=FCF2 x 1.08=100,000 x 1.08= 108000 | ||||||
| 108000.00 | ||||||
| $ 1,080,000.00 | ||||||
| Value of operations 80000/(1+0.18)^1+100000/(1+0.18)^2+D26/(1+0.18)^2 | ||||||
| $ 915,254.24 | ||||||
| Problem 3 | ||||||
| 40000000(1+0.08)/(0.17-0.07) | ||||||
| Terminal Value | $ 432,000,000.00 | |||||
| value=-$20,000,000 / (1.17) + $30,000,000 / (1.17)^2 + $40,000,000 /(1.17)^3+$713,333,333 / (1.17)^3 | ||||||
| $ 475,180,541.74 | ||||||
| Value= debt + equity |
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Problem 1
required rate of return=
Current stock price (Po)=D1/(ke-g)
