Question: Question 16 Consider the following data for XMart Inc. Net income - 4000, Capital expenditure = 800, depreciation = 360, last year WC = 1600.

Question 16 Consider the following data for XMart Inc. Net income - 4000, Capital expenditure = 800, depreciation = 360, last year WC = 1600. this year WC - 1800, EBIT - 8000, t= 34%. The firm retired $400 debt and issued $600 new debt. Change in other assets is $100. (a) Calculate the free cash flow to equity and to form for this year. (b) If growth in free cash flow to equity is expected to be 2% forever, firm has 500 shares outstanding, and Ke=10%, calculate the target stock price. Show all work. Tools Table

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!

Calculate and analyze the projected profitability of the online store if the Exchange Tower store were to close for the 2020/2021 period. ONLINE SALES Piltz grouped Thursdays' online customers into...

Consider the following data for XMart Inc. Net income - 4000, Capital expenditure - 800 depreciation - 360, last year WC - 1600, this year WC - 1800, EBIT-8000, -34%. The form retired $400 debt and...

Consider the following data for XMart Inc. Net income - 5000, Capital expenditure - 1200, depreciation - 360, last year WC - 1600, this year WC - 1800, EBIT - 9000, - 34%. The firm retired $400 debt...

Question 29 3 pts The loss aversion theory developed by Tversky and Kehneman states the value function (utility) of investors depend on change in wealth individuals are risk averse for gains but are...

2. The exponential 5-day moving average was $42 last Monday. The closing price on Tuesday was 42.60. The stock had a 30 day high of $46 and a 30 day low of $35. (a)What will be the exponential MA at...

Consider the following data for Miami Inc. Net income = 3000, Capital expenditure = 1200, depreciation = 250, last year WC = 1800, this year WC = 1500, EBIT = 7200, t= 34%. The firm retired $500 debt...

QUESTION 1 UML Inc. had an EBIT of 75,000, depreciation expense of 8,500, and paid 20,000 in taxes. Its interest costs were $10,000; its long-term borrowing reduced by $4,000; it raised $6,000 in new...

each item in common-sized income statement or balance sheet, we calculated the average of past three-year percentage as a projected percentage in 2007. Then use predicted sales and predicted total...

Question 1 A petty cash fund is: Select one: a. used to pay relatively small amounts. b. established by estimating the amount of cash needed for disbursements of relatively small amounts during a...

Define the following terms: a. The law of one price. b. Absolute purchasing power parity. c. Relative purchasing power parity.

Please pick an example of a human rights problem that you think is important in the world right now. This can be within Pakistan, or anywhere else in the world: Your answer should have three overall...

What is the percentage by mass of nitrogen in ammonium nitrate, NH 4 NO 3 ?

Enos Printing Corp. uses a job order cost system. The following data summarize the operations related to the first quarter's production. 1. Materials purchased on account $194,400, and factory wages...