On December 31, 2006, a stock analyst has forecasted that Hart Enterprises should generate free cash...

 

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On December 31, 2006, a stock analyst has forecasted that Hart Enterprises should generate free cash flows of $1,000 in 2007 and 1,500 in 2008 and 2,000 in 2009. Thereafter, free cash flow for Hart Enterprises is expected to grow at an annual rate of 5%. Hart Enterprises has a weighted average cost of capital (WACC) of 10%. Hart Enterprises has Notes Payable and Long-term Debt of $20,000 and no Preferred Stock. Hart Enterprises has 10,000 shares of common stock outstanding. What is the total value of Hart Enterprises (6 points)? On December 31, 2006, a stock analyst has forecasted that Hart Enterprises should generate free cash flows of $1,000 in 2007 and 1,500 in 2008 and 2,000 in 2009. Thereafter, free cash flow for Hart Enterprises is expected to grow at an annual rate of 5%. Hart Enterprises has a weighted average cost of capital (WACC) of 10%. Hart Enterprises has Notes Payable and Long-term Debt of $20,000 and no Preferred Stock. Hart Enterprises has 10,000 shares of common stock outstanding. What is the total value of Hart Enterprises (6 points)?

Answer rating: 100% (QA)

To calculate the total value of Hart Enterprises we need to estimate the present value of its future ... View the full answer