Question: Please solve and show Please solve and show work for the following 4 questions. Please calculate the Enterprise Value, Market Cap, EPS, Share Price, and
Please solve and show Please solve and show work for the following questions. Please calculate the Enterprise Value, Market Cap, EPS, Share Price, and PE Multiple for each of the questions. Please dont re answer the question if you already answered it before in Chegg.
The following four questions concern a hypothetical public company, ABC Corp. ABC is expected to earn net income equal to free cash flow of $bn in the next twelve months NTM Its stock trades at a PE multiple of x NTM ABC has bn shares outstanding, zero gross debt and $bn of excess cash not used in operations Calculate the following financial metrics for ABC Corp:
Enterprise Value
Market cap
EPS NTM
Share price
PE multiple NTM
Assume that ABC Corp makes a new $bn capital investment Assume that the capital investment is funded with excess cash earning and is expected to increase the Companys free cash flow equal to net income by $mm in the next twelve months, growing thereafter at per annum in perpetuity. The $bn will be invested fully at the beginning of the NTM period. Assume that the market value of the company will immediately adjust to reflect the expected intrinsic value of the capital investment. Calculate the following financial metrics for ABC Corp, assuming a cost of capital:
Enterprise value
Market cap
EPS NTM
Share price
PE multiple NTM
Assume that in lieu of the capital investment, ABC had decided to make a onetime dividend payment of $bn funded with excess cash earning paid at the beginning of the NTM period. Assume there has been no change to the outlook for the operating earnings, operating cash flow or associated risks of ABC following the dividend payment. Calculate each of the following pro forma financial metrics for ABC:
Enterprise value
Market cap
EPS NTM
Share price
PE multiple NTM
Assume that in lieu of the capital investment and the dividend payment, ABC had decided to make a onetime share buyback of $bn funded with excess cash earning Assume that the shares are to be repurchased at the beginning of the period at a price equal to their market price prior to announcement of the transaction from Q above Assume there has been no change to the outlook for the operating earnings, operating cash flow or associated risks of the company following
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
