Business, 18.03.2021 01:50 gaby8282

1. You have been hired as a consultant to develop a valuation model for Terrapins, Inc. Management has provided you with partial income statement and balance sheet. Below is information for the most recent year (2020, year 0) and projected information for 2021. All numbers are in millions. After 2021, the firm is expected to grow at 3% in perpetuity. The weighted average cost of capital (WACC) is 12% and the corporate tax rate is 25%. There are 200 million shares outstanding. a. What is your estimate of 2021 free cash flow? (50) b. What is your estimate of the value of Terrapins, Inc as of January 1, 2021? Assume that 2020 free cash flow has already been distributed. (30) c. What is your estimate of a single share of stock in Terrapins, Inc.? (20)

Answers: 2

Show answers

Another question on Business

Business, 22.06.2019 03:30

Used cars usually have options: higher depreciation rate than new cars lower financing costs than new cars lower insurance premiums than new cars lower maintenance costs than new cars

Answers: 1

Answer

Business, 22.06.2019 17:30

Aproject currently generates sales of $14 million, variable costs equal 50% of sales, and fixed costs are $2.8 million. the firm’s tax rate is 40%. assume all sales and expenses are cash items. (a). what are the effects on cash flow, if sales increase from $14 million to $15.4 million? (input the amount as positive value. enter your answer in dollars not in (b) what are the effects on cash flow, if variable costs increase to 60% of sales? (input the amount as positive value. enter your answers in dollars not in millions). cash flow (increase or decrease) by $

Answers: 2

Answer

Business, 22.06.2019 19:50

Juan's investment portfolio was valued at $125,640 at the beginning of the year. during the year, juan received $603 in interest income and $298 in dividend income. juan also sold shares of stock and realized $1,459 in capital gains. juan's portfolio is valued at $142,608 at the end of the year. all income and realized gains were reinvested. no funds were contributed or withdrawn during the year. what is the amount of income juan must declare this year for income tax purposes?

Answers: 1

Answer

Business, 22.06.2019 20:10

Assume that a local bank sells two services, checking accounts and atm card services. the bank’s only two customers are mr. donethat and ms. beenthere. mr. donethat is willing to pay $8 a month for the bank to service his checking account and $2 a month for unlimited use of his atm card. ms. beenthere is willing to pay only $5 for a checking account, but is willing to pay $9 for unlimited use of her atm card. assume that the bank can provide each of these services at zero marginal cost.refer to scenario 17-5. if the bank is unable to use tying, what is the profit-maximizing price to charge for a checking account

Answers: 3

Answer

You know the right answer?

1. You have been hired as a consultant to develop a valuation model for Terrapins, Inc. Management h...

Questions