Brandtly Industries invests a large sum of money in R&D; as a result, it retains and reinvests
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Question:
Brandtly Industries invests a large sum of money in R&D; as a result, it retains and reinvests all of its earnings. In other words, Brandtly does not pay any dividends, and it has no plans to pay dividends in the near future. A major pension fund is interested in purchasing Brandtly's stock. The pension fund manager has estimated Brandtly's free cash flows for the next years as follows: $ million, $ million, $ million, and $ million.
After the fourth year, free cash flow is projected to grow at a constant
Brandtly's WACC is the market value of its debt and preferred stock totals $ million, the firm has $ million in nonoperating assets, and it has million shares of common stock outstanding.
What is the market value of the company's operations?
The market value of the operations sum of the present values of the company's free cash flows & terminal value.
Do not round intermediate calculations. Round your answer to the nearest dollar.
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