Calculate what you think the share price for company X should be given the following information...

 

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Calculate what you think the share price for company X should be given the following information and modelling firm value as a perpetuity with growth: Cash Flow From Operations= 15,500m Capital Expenditure= 4,600m Interest Expense= 950m Corporate Tax= 30% Growth rate= 2% every year Cash on Balance Sheet = 6,200m Number of Shares = 5,000m Total Debt = 8,000m Total Equity=90,000m Cost of Equity re= 9.5% Cost of Debt rd= 4% If the share currently costs $12 in the market, what action would you take? Calculate what you think the share price for company X should be given the following information and modelling firm value as a perpetuity with growth: Cash Flow From Operations= 15,500m Capital Expenditure= 4,600m Interest Expense= 950m Corporate Tax= 30% Growth rate= 2% every year Cash on Balance Sheet = 6,200m Number of Shares = 5,000m Total Debt = 8,000m Total Equity=90,000m Cost of Equity re= 9.5% Cost of Debt rd= 4% If the share currently costs $12 in the market, what action would you take? Calculate what you think the share price for company X should be given the following information and modelling firm value as a perpetuity with growth: Cash Flow From Operations= 15,500m Capital Expenditure= 4,600m Interest Expense= 950m Corporate Tax= 30% Growth rate= 2% every year Cash on Balance Sheet = 6,200m Number of Shares = 5,000m Total Debt = 8,000m Total Equity=90,000m Cost of Equity re= 9.5% Cost of Debt rd= 4% If the share currently costs $12 in the market, what action would you take?

Answer rating: 100% (QA)

To calculate the value of company X we can use the following formula Value of the Compa... View the full answer