Details of this Paper

Problem 13-7 "TUTOR CAN YOU PLACE THE RESULTS ON A...

Description

Solution


Question

Problem 13-7 "TUTOR CAN YOU PLACE THE RESULTS ON A EXCEL SPREADSHEET, QUESTION #1. AND #2. ARE CORRECT ALL I NEED IS QUESTION #3 TO BE ANSWERED, THANK YOU. Corporate Valuation eBook Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 7% rate. Dozier's weighted average cost of capital is WACC 13%. Year 1 2 3 Free cash flow ($ millions) - $20 $30 $40 #1. What is Dozier's terminal, or horizon, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.). Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places. $ 713.33 million #2. What is the current value of operations for Dozier? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places. $ 527.89 million #3. Suppose Dozier has $11 million in marketable securities, $120 million in debt, and 11 million shares of stock. What is the price per share? Round your answer to the nearest cent. $_______,Tutor i am sorry to ask again but the answer came up wrong can you check the problem again,Dear tutor I emailed my professor for so clarification on this problem and this was his response on how he wants the problem solved, can you please apply his method. Thank you so much. My question to the Prof Attached is a excel file with my calculation for the problem, I have gone over them, the formulas are correct but the answer comes up wrong. His response The cash flow in year 1 is -40. You must include the negative sign. The terminal value cash flow calculated wrongly by you cell g6. However, you found the correct value in part A (The numerator is simply (WACC -g). (It is not raised to any power). Furthermore this terminal value cash flow does not occur i yr. 4 (as you have it) but in year3. It must be added to the $40 FCF of Year 3 (eg. 713.33+40). Then find its PV

 

Paper#6999 | Written in 18-Jul-2015

Price : $25
SiteLock