Question: B Font LZ Paragraph Assignment #2 1) Watkins Inc. has never paid a dividend, and it's not known when the firm might begin paying

B Font LZ Paragraph Assignment #2 1) Watkins Inc. has never paid

B Font LZ Paragraph Assignment #2 1) Watkins Inc. has never paid a dividend, and it's not known when the firm might begin paying dividends. Its current free cash flow is $100,000, and this FCF is expected to grow at a constant 7% rate. The weighted average cost of capital is WACC = 11%. Watkins currently holds $325,000 of non operating marketable securities. Its long-term debt is $1,000,000, but it has never issued preferred stock. Watkins has 50,000 shares of stock outstanding. a) Calculate Watkins's value of operations. b) Calculate the company's total value. c) Calculate the intrinsic value of its common equity. d) Calculate the intrinsic per share stock price.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

2. Kubota invests in Vietnam (A-intermediate). Kubota, the Japanese manufacturer of tractors and small earthmoving equipment, is considering building an assembly plant in Da Nang (Vietnam). The...

Return to question Pharmecology just paid an annual dividend of $1.75 per share. It's a mature company, but future EPS and dividends are expected to grow with inflation, which is forecasted at 4.75%...

Q4. Suppose that Saregama India Limited, the music company, has the copyright to the latest pop album of the band Euphoria. The market demand curve for the album is Q) = 800 - 100p, where Q...

This have to be completed in the attached spreadsheet . 3-1 Homework: Stock Valuation Calculations This homework submission should include all calculations, completed on the designated tab of the...

can a non-significant phi correlation have confound variables? I completed my Phi correlation for my variables of gender and personality. Personality type was either "A or B" so both variables are...

(ST1) Corporate Valuation Watkins Inc. has never paid a dividend, and its not known when the firm might begin paying dividends. Its current free cash flow is $100,000, and this FCF is expected to...

Watkins Inc. has never paid a dividend, and when the firm might begin paying dividends is not known. Its current free cash flow is $100,000, and this FCF is expected to grow at a constant 7% rate....

Watkins Inc. has never paid a dividend, and when it might begin paying dividends is unknown. Its current free cash flow (FCF) is S100,000 which is expected to grow at a constant 7% rate. The weighted...

Question 3. Watkins Inc. has never paid a dividend, and when it might begin paying dividends is unknown. Its current free cash flow is $500,000, and this FCF is expected to grow at a constant 6...

Alberto Inc. currently holds $410,000 of non-operating marketable securities. Its long-term debt is $1,500,000, but it has never issued preferred stock. Alberto has 65,000 shares of stock...

Hi There, I need someone to help me with the attached finance worksheet. There are 3 problems in this excel file - one problem on each individual tab. I am attaching a couple of additional files as...

Predict the major product that is obtained when the following alkyl halides is treated with potassium terf-butoxide. Explain your reasoning. OCH CH CHI

In the figure below, AB and GE are parallel. Triangle ACD is isosceles with the lengths of CA and CD equal. The measures of angles FDE and GDH are 60 and 65 respectively. What is the measure of angle...

The inferest rate a company pars on 1 - year, 5 - year, and 1 0 - year loars is a partly determined by the length of the term over which repayment is scheduled to occur - the interest rate is lowest...

On April 1, Moloney Meat Distributors sold merchandise on account to Fronkes Franks for $3,000 on Invoice 1001, terms 1/10, n/30. Payment was received in full from Fronkes Franks, less discount, on...

On November 1, 2007, Janet Morton and Kim Wong formed Pet Kingdom, Inc., to sell pets and pet supplies. Pertinent information regarding Pet Kingdom is summarized as follows: Pet Kingdom's business...

Partially completed T-accounts and additional information for Cardinals, Inc., for the month of November follow. Additional information for November follows: Labor wage rate was $30 per hour. ...

The following transactions took place at Five Flags Amusement Park during May. Five Flags Amusement Park must charge 8 percent sales tax on all sales: DATE TRANSACTIONS 2019 May 1 Sold merchandise on...

Record the following transactions of Fashion Park in a general journal. Fashion Park must charge 8 percent sales tax on all sales. DATE TRANSACTIONS 2019 April 2 Sold merchandise for cash, $2,500...

Determine if the overhead allocated to the product relates to a single plantwide overhead rate method, multiple production department factory overhead rate method, or activity-based costing...

Quality control. A tire manufacturer recently announced a recall because 2% of its tires are defective. If you just bought a new set of four tires from this manufacturer, what is the probability that...

Toy company. A toy company manufactures a spinning game and needs to decide what probabilities are involved in the game. The plastic arrow on the spinner stops rotating to point at a color that will...

Store discounts. Many stores run secret sales: Shoppers receive cards that determine how large a discount they get, but the percentage is revealed by scratching off that black stuff (what is that?)...