12 ed LA TROBE UNIVERSITY out of La Trobe Home question Library Home This question is...

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12 ed LA TROBE UNIVERSITY out of La Trobe Home question Library Home This question is based on the following information: You are trying to estimate the intrinsic value of the shares of Flying High Ltd, a manufacturer of unmanned aerial vehicles, or drones. The company is headquartered in Melbourne, and sells its drones throughout Australia and New Zealand. It is a public company, but is not yet listed on the stock exchange. There are 20,000 shares outstanding. The required rate of return for equity is 19.96%. Students Based on the 2021 financial statements, you calculate Free Cash Flow to the Firm in 2021 to have been $73,000, and you believe that this will grow at 4.5% in perpetuity. The firm has just announced a restructure of its debt financing, As a result, the value of the firm's debt is now $336,000. This will change the firm's WACC. The WACC you calculated in the previous question was the historical WACC, but from now on the WACC will be 11.3% and this should be used for all valuation purposes. What is the value of the firm using a Free Cash Flow Discount Model? O a. $984529 O b. $1121838 O c. $1073529 O d. $1053838 MacBook Air 12 ed LA TROBE UNIVERSITY out of La Trobe Home question Library Home This question is based on the following information: You are trying to estimate the intrinsic value of the shares of Flying High Ltd, a manufacturer of unmanned aerial vehicles, or drones. The company is headquartered in Melbourne, and sells its drones throughout Australia and New Zealand. It is a public company, but is not yet listed on the stock exchange. There are 20,000 shares outstanding. The required rate of return for equity is 19.96%. Students Based on the 2021 financial statements, you calculate Free Cash Flow to the Firm in 2021 to have been $73,000, and you believe that this will grow at 4.5% in perpetuity. The firm has just announced a restructure of its debt financing, As a result, the value of the firm's debt is now $336,000. This will change the firm's WACC. The WACC you calculated in the previous question was the historical WACC, but from now on the WACC will be 11.3% and this should be used for all valuation purposes. What is the value of the firm using a Free Cash Flow Discount Model? O a. $984529 O b. $1121838 O c. $1073529 O d. $1053838 MacBook Air

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