Question: please answer all questions!! please state if its in millions!!!!! do not just write decimals Q4-06 are based on the following information In the year

please answer all questions!!
please state if its in millions!!!!! do not just write decimals
 please answer all questions!! please state if its in millions!!!!! do

Q4-06 are based on the following information In the year prior to going public, a firm has revenues of $20 million and net income after taxes of $2 million. The firm has no debt, and revenue is expected to grow at 20% annually for the next five years and 5% annually thereafter. Net profit margins are expected remain constant throughout Capital expenditures are expected to grow in line with depreciation and working capital requirements are minimal. The average beta of a publicly traded company in this industry is 150 and the average debt/equity ratio is 20%. The firm is managed very conservatively and does not intend to borrow through the foreseeable future. The Treasury bond rate is 6% and the tax rate is 40%. The normal spread between the return on stocks and the risk free rate of retum is believed to be 5.5% Reflecting the slower growth rate in the sixth year and beyond, the discount rate is expected to decline by 3 percentage points. Estimate the value of the firm's equity 4 What is the beta of this firm? QUESTION 3 5. What is the cost of equity in the first five years? (Provide your answer in decimals, ie, enter 0.1 instead of 10%) QUESTION 4 6. What is the total value of this firm? (Answer must be in million dollars, but write the number only) 634100000

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