Summit Systems has an equity cost of capital of 10.5%, will pay a dividend of $1 .25

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Summit Systems has an equity cost of capital of 10.5%, will pay a dividend of $1 .25 in one year, and its dividends had been expected to grow by 6.0% per year. You read in the paper that Summit Systems has revised its growth prospects and now expects its dividends to grow at a rate of 3.0% per year forever. a. What is the drop in value of a share of Summit Systems stock based on this information? b. If you tried to sell your Summit Systems stock after reading this news, what price would you be likely to get? Why? E) a. What is the drop in value of a share of Summit Systems stock based on this information? The drop in value of a share of Summit Systems stock is $ . (Round to the nearest cent.) Roybus, Inc, a manufacturer of flash memory, just reported that its main production facility in Taiwan was destroyed in a fire. Although the plant was fully insured, the loss of production will decrease Roybus's free cash ow by $181 million at the end of this year and by $64 million at the end of next year. a. If Roybus has 38 million shares outstanding and a weighted average cost of capital of 13.4%, what change in Roybus's stock price would you expect upon this announcement? (Assume that the value of Roybus's debt is not affected by the event.) b. Would you expect to be able to sell Roybus stock on hearing this announcement and make a prot? Explain. E) a. If Roybus has 38 million shares outstanding and a weighted average cost of capital of 13.4%, what change in Roybus's stock price would you expect upon this announcement? (Assume that the value of Roybus's debt is not affected by the event.) The change in price per share would be $ . (Round to the nearest cent.) You notice that Coca-cola has a stock price of $40.58 and EPS of $1.79. Its competitor PepsiCo has EPS of $3.58. But, Jones Soda, a small batch craft soda producer has a P/E ratio of 33.5. Based on this information, what is one estimate of the value of a share of PepsiCo stock? . . . One share of PepsiCo stock is valued at $ . (Round to the nearest cent.)Heavy Metal Corporation is expected to generate the following free cash ows over the next ve years: a . Thereafter, the free cash flows are expected to grow at the industry average of 3.8% per year. Using the discounted free cash ow model and a weighted average cost of capital of 13.4%: a. Estimate the enterprise value of Heavy Metal. b. If Heavy Metal has no excess cash, debt of $319 million, and 43 million shares outstanding, estimate its share price. a. Estimate the enterprise value of Heavy Metal. The enterprise value will be $3 million. (Round to two decimal places.) Data table (Click on the following icon CI in order to copy its contents into a spreadsheet.) Year 1 2 3 4 5 FCF ($ million) I 52.5 66.9 76.9 81.2 Portage Bay Enterprises has $3 million in excess cash, no debt, and is expected to have free cash ow of $9 million next year. Its FCF is then expected to grow at a rate of 3% per year forever. If Portage Bay's equity cost of capital is 10% and it has 5 million shares outstanding, what should be the price of Portage Bay stock? The price of Portage Bay's stock is $ per share. (Round to the nearest cent.) This year, FCF Inc. has earnings before interest and taxes of $9,270,000, depreciation expenses of $1,400,000, capital expenditures of $1,800,000, and has increased its net working capital by $400,000. If its tax rate is 22%, what is its free cash ow? The company's free cash ow is $ID. (Round to two decimal places.)