A company reports operating cash flows of $100,000 and net capital expenditures of $50,000. Its net new

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A company reports operating cash flows of $100,000 and net capital expenditures of $50,000. Its net new borrowing over the last year was $10,000. It paid interest of $9,000. Its tax rate was 20%.

The company's stock beta is 2. The riskfree rate is 4% and the equity risk premium is 10%. The company's WACC is 9%. Its ROE is 8% and the company retains 80% of net income.

What is the total enterprise value (TEV) of the firm, using the stable growth model?

Related Book For answer-question

Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

ISBN: 978-1337614689

9th edition

Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

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Posted Date: Dec 12, 2022 06:02 AM

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A company reports operating cash flows of $100,000 and net capital expenditures of $50,000. Its net new

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Calculation of growth rate Growth Retention ratio ROE 80 8 64 WACC 9 Since we have to calculate Tot... View the full answer

Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

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