The following forecasts were developed at the end of 2022 for Endless Sunny Days (ESD), a...
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The following forecasts were developed at the end of 2022 for Endless Sunny Days (ESD), a company that has a cost of capital for its operations of 8% and a cost of capital for its equity of 12% (amounts are in millions of dollars): Cash flow from operations 2023E 135 95 2024E 215 165 2025E 270 125 Cash investment expenditure At the end of 2022, the book value of equity was $370 and the net financing debt was $360. 1. Forecast Free Cash Flows for 2023, 2024 and 2025. 2. Calculate the present value of Forecast Free Cash Flows for 2023, 2024 and 2025. 3. Using a terminal growth rate in free cash flow after 2025 of 1%, calculate the present value of cash flows to be received in the terminal period. 4. Using your answers to previous questions, estimate the total market value of equity for the firm. The following forecasts were developed at the end of 2022 for Endless Sunny Days (ESD), a company that has a cost of capital for its operations of 8% and a cost of capital for its equity of 12% (amounts are in millions of dollars): Cash flow from operations 2023E 135 95 2024E 215 165 2025E 270 125 Cash investment expenditure At the end of 2022, the book value of equity was $370 and the net financing debt was $360. 1. Forecast Free Cash Flows for 2023, 2024 and 2025. 2. Calculate the present value of Forecast Free Cash Flows for 2023, 2024 and 2025. 3. Using a terminal growth rate in free cash flow after 2025 of 1%, calculate the present value of cash flows to be received in the terminal period. 4. Using your answers to previous questions, estimate the total market value of equity for the firm.
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Forecast Free Cash Flows for 2023 2024 and 2025 To calculate the Free Cash Flows FCF we subtract the ... View the full answer
Related Book For
Financial Accounting Tools for Business Decision Making
ISBN: 978-1119368458
7th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
Posted Date:
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