Charles Jones is evaluating Reliant Home Furnishings by using a three-stage growth model. He has accumulated the following information:
· Current FCFF $745 million
· Outstanding shares 309.39 million
· Equity beta 0.90,
· risk-free rate 5.04 percent;
· equity risk premium 5.5 percent
· Cost of debt 7.1 percent
· Marginal tax rate 34 percent
· Capital structure 20 percent debt, 80 percent equity
· Long-term debt $1.518 billion
· Growth rate of FCFF
- 8.8 percent annually in stage 1, years 1–4
- 7.4 percent in year 5,
- 6.0 percent in year 6,
- 4.6 percent in year 7
- 3.2 percent in year 8 and thereafter
From the information that Jones has accumulated, estimate the following:
b) WACC. (1 marks)
c) Total value of the fi rm. (HINT: Use Supernormal Method with FCFF to find the Intrinsic Value) (2 marks)
d) Total value of equity. (HINT: InTrinsic Value from (c ) – Long term debt) (2 marks)
e) Value per share. (HINT: Total value of Equity / outstanding shares) (2 marks)
Answers
b) To calculate the Weighted Average Cost of Capital (WACC), we need to determine the cost of equity and the cost of debt.
Cost of Equity:
Risk-free rate = 5.04%
Equity risk premium = 5.5%
Equity beta = 0.90
Cost of Equity = Risk-free rate + (Equity risk premium * Equity beta)
Cost of Equity = 5.04% + (5.5% * 0.90)
Cost of Equity = 9.99%
Cost of Debt = 7.1%
Capital Structure:
Debt = 20%
Equity = 80%
WACC = (Weight of Debt * Cost of Debt) + (Weight of Equity * Cost of Equity)
WACC = (0.20 * 7.1%) + (0.80 * 9.99%)
WACC = 1.42% + 7.99%
WACC = 9.41%
Therefore, the WACC for Reliant Home Furnishings is 9.41%.
c) Total value of the firm:
We will use the supernormal growth method to calculate the intrinsic value of the firm. We will discount the FCFF at the appropriate discount rates for each growth stage.
Year 1-4: FCFF growth rate = 8.8%
Year 5: FCFF growth rate = 7.4%
Year 6: FCFF growth rate = 6.0%
Year 7: FCFF growth rate = 4.6%
Year 8 onwards: FCFF growth rate = 3.2%
Discount rate for each year = WACC
Calculate the present value of each year's FCFF and sum them up to get the total value of the firm.
d) Total value of equity:
Total value of the firm - Long-term debt
e) Value per share:
Total value of equity / Outstanding shares
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Related Questions
Use this completely fictitious S-D table to answer the questions: Demand for apples Price per pound $0.50 7,500 6,500 $1 5,500 $1.50 4,500 $2 3,500 $2.50 2,500 $3 1,500 $3.50 Supply of apples 1,000 1,
Answers
The equilibrium price is $2 per pound, the equilibrium quantity is 1,900 pounds, and the total revenue at the equilibrium is $3,800.
To find the equilibrium price and quantity, we need to identify the point where the quantity demanded equals the quantity supplied. In other words, it's where the demand and supply curves intersect.
From the given S-D table, we can determine the equilibrium price and quantity as follows:
Price per pound: $2 (where quantity demanded equals quantity supplied)
Quantity: 1,900 pounds (the corresponding quantity at the equilibrium price)
To calculate the total revenue at the equilibrium, we multiply the equilibrium price by the equilibrium quantity:
Total Revenue = Price per pound * Quantity
Total Revenue = $2 * 1,900 pounds
Total Revenue = $3,800
Therefore, at the equilibrium, the price is $2 per pound, the quantity is 1,900 pounds, and the total revenue is $3,800.
The complete question must be:
Use this completely fictitious S-D table to answer the questions: Demand for apples Price per pound $0.50 7,500 6,500 $1 5,500 $1.50 4,500 $2 3,500 $2.50 2,500 $3 1,500 $3.50 Supply of apples 1,000 1,300 1,600 1,900 2,200 2,500 2,800 a) Find the equilibrium price and quantity and calculate total revenue at the equilibrium.
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what difference would it make to the economy if there were no money? What commodities might serve as money instead? Provide reason for your answers.
Answers
Answer:
Well, we would simply be reduced to a barter economy. Therefore we would have to trade items for items.
Explanation:
This is the way it is because "Barter" is The exchange (goods or services) for other goods or services without using money. So if we needed beef, we would have to give the person trading the beef something of ours. As for countries who want to trade, if one needs wool, and one needs iron, and country A has Iron and country B has wool They'd barter the two items.
Question 2 of 10
When is a table the most effective way to present information?
OA. When graphs are more expensive to create.
B. When you want to show how parts fit together.
OC. When you want to show the parts of a whole.
OD. When you want to make many details available in an organized
way.
Answers
Answer:
D. When you want to make many details available in an organized way.
Explanation:
When is a table the most effective way to present information?
A. When graphs are more expensive to create.
Not a good answer. Graphs may be less expensive than a table, depending on the data provided, and especially with free online graphing utilities.
B. When you want to show how parts fit together.
Unclear as to how a table would make it easier to see how parts fit together. A table conveys information about categories, not how they fit together.
C. When you want to show the parts of a whole.
As with (B), tables are not ideal for showing parts of a whole.
D. When you want to make many details available in an organized way.
This is a good answer. When organized properly, tables can communicate major differences in data sets, such as Sales by year and region, or Joules energy per reaction.
A finance question that I need help with.
Answers
what is the perfectly competitive firm’s profit maximizing output level (q*) when the market selling price (the market equilibrium price) is $10?
Answers
In a perfectly competitive market, the profit-maximizing output level (q*) for a firm occurs where marginal revenue (MR) equals marginal cost (MC).
At this level of output, the firm will be producing at the point where additional units of output just cover the cost of producing them, resulting in maximum profits.
When the market selling price is $10, the firm will take this price as given and adjust its output level accordingly. Assuming that the firm's cost structure is such that the marginal cost (MC) of production is constant at all levels of output, we can determine the profit-maximizing output level as follows:
If the market selling price is $10, then the marginal revenue for the firm is also $10, since each additional unit sold will generate an additional $10 in revenue. At the profit-maximizing output level, MR = MC.
Therefore, if MC = $10, then q* = MR / MC = $10 / $10 = 1.
This means that the profit-maximizing output level for the perfectly competitive firm when the market selling price is $10 would be one unit of output. At this level of output, the firm would be producing the quantity that would allow it to earn maximum profits given the market conditions and its cost structure.
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how are ethics and supply-chain management related? quizlet
Answers
Ethics and supply-chain management are closely related as ethical considerations play a crucial role in guiding responsible and sustainable practices within supply chains.
Supply-chain management involves the coordination and management of various activities, such as sourcing, manufacturing, transportation, and distribution, to ensure the efficient flow of goods and services from suppliers to end consumers. In this complex network, ethical considerations are necessary to address social, environmental, and economic impacts.
Ethics in supply-chain management encompass several key aspects. Firstly, there is a growing emphasis on ensuring fair labor practices and human rights throughout the supply chain. This includes avoiding forced labor, child labor, and exploitative working conditions, as well as promoting fair wages and worker safety.
Secondly, environmental ethics are vital in supply-chain management. Companies are increasingly expected to adopt sustainable practices, reduce carbon emissions, minimize waste, and promote responsible sourcing of raw materials. Ethical supply-chain management seeks to mitigate environmental impacts and promote sustainable development.
Thirdly, ethical considerations extend to the relationships between companies and their suppliers. This involves maintaining transparency, promoting fair trade practices, and preventing corruption and bribery. Ethical supply-chain management also encourages responsible sourcing by ensuring that suppliers adhere to social and environmental standards.
Furthermore, ethical supply-chain management involves the consideration of the broader social and economic impacts of supply chains. This includes supporting local communities, promoting diversity and inclusion, and contributing positively to the economies of the regions where supply chains operate.
In summary, ethics and supply-chain management are intertwined because ethical considerations guide responsible decision-making and promote sustainability, fair practices, and social responsibility throughout the supply chain. Integrating ethics into supply-chain management is essential for businesses to build trust, mitigate risks, and contribute to a more ethical and sustainable global economy.
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he commenced business with Rs 60000 cash and goods worth Rs 20000 .(Journal entries)
Answers
Answer:
extra Rs 40000 remaining after subtracting 20000 from
60000,the reminder is 40000.
plus what's the question i just guessed the question,cause the was no visible Q!
When looking at your credit card statement, what is a "Previous balance" ?
A: It is the amount you paid in interest during the last month
B: It is the amount still owed after making last months payment
C: It is the amount you paid on your last payment
D: It is the amount you were charged in interesting during the last month
Answers
On a credit card statement, the term "Previous balance" means the amount still owed after making last months payment.
What is a credit card statement?In credit sector, the credit card statement means the statement that shows the complete log of your account activity during a specific period. It typical entails any payments, credits, interest and charges you have accrued during the period as well as details including the total account balance, statement balance, minimum payment due, due date etc.
In short, the credit card statement shows a credit-holder the summary of how they used their credit card for a billing period.
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Give date and the sum of tax and shipping for each sale from December 20th through December 25th of 2015. (use BETWEEN. Name the calculated column SUM) NOTE: Due to an anomoly within MySQL for numeric fields, sometimes calculated results have 14 decimal places and inexact amounts. To ensure your answer is correct use the ROUND function to two decimal places, i. E. ROUND(Tax+Shipping,2)
Answers
ROUND(TAX+SHIPPING, 2) CHOOSE DATE is the sum of sales with a date between "2015-12-20" and "2015-12-25". The total income a firm receives from the sale of its goods or services .
during a given time period is known as the sum of sales. It's critical for a corporation to calculate its total sales in order to comprehend its financial health, profitability, and room for expansion. This indicator can be used to assess how well a company's sales strategies—including its price, promotions, and marketing initiatives—are working. Also, the total sales can be compared between time periods to spot trends and pinpoint areas that need improvement. A company can grow revenue and manage operations by looking at the total amount of sales.
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Explain why the credit industry wants you to believe that you need a credit score
Answers
Answer:
Because the credit industry gains a profit from it's users. Credit is a tool, and if used wisely can be beneficial for many people who don't have enough cash to pay for things. Having "good" credit score means that it's easier for you to receive a loan.
Let understand that Credit score refers the score which tells about a consumer's creditworthiness.
In practice, the higher the credit score of an individual, the higher the rate of repayment of credit gotten.
The Credit scoring is used the lenders to help them decide whether to borrow, extend or deny credit.
Therefore, the credit industry wants one to believe you need credit score because its helps them to ascertain your creditworthiness.
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To examine
the weekly payroll of all employees, one would look at the:
Answers
To examine the weekly payroll of all employees, one would look at the: d. payroll register.
What is the payroll register?The payroll register is a book or record that is used to fill in the details of all the employees and their payment logs. A record of this register is often kept in good condition in case of any future discrepancies that will have to be resolved.
A person who wants to examine the weekly payroll of all employees in an organization must be able to look at the payroll register to know what is obtainable. There, he would find the names of the employees, their job roles and payment record.
Options:
a. W-4
b. employee earnings record
c. W-2
d. payroll register.
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Grainger Distribution Company sold Long Electronics ten circuit breakers for $179.00 each. Long Electronics will be allowed thirty days to pay the bill. Grainger will carry the $1790.00 on its books as a(n):
Answers
In its accounting statement, Grainger will carry the $1,790.00 on its books as an accounts receivable.
What is an accounts receivable?This refers to the payment that the company will receive from its customers who have purchased its product.on credit.
Therefore, the amount of $1,790.00 on its books will be recorded as an accounts receivable.
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HURRY PLEASE 25 POINTS WILL GIVE BRAINLIEST
In three to five sentences, describe what a cold call is and how to prepare for one.
Answers
Answer: Cold calling (sometimes written with a hyphen) is the solicitation of a potential customer who had no prior interaction with a salesperson. A form of telemarketing, cold calling is one of the oldest and most common forms of marketing for salespeople.
Start off by saying “Hi, [NAME],” in a warm and welcoming tone, then proceed directly to Step 2. Notice I didn't say, “Hi, [NAME], how are you today?” because it gives your prospect a chance to jump in and disrupt your flow. Cold calls are all about taking control in the beginning. Identify yourself.
Explanation:
Answer:
Cold calling (sometimes written with a hyphen) is the solicitation of a potential customer who had no prior interaction with a salesperson. Start off by saying “Hi, jack,” in a warm and welcoming tone, then proceed directly to Step 2. Notice I didn't say, “Hi, jack, how are you today?” because it gives your prospect a chance to jump in and disrupt your flow. cold calling is one of the oldest and most common forms of marketing for salespeople.
Explanation:
the ambitous jackle
How different would your life be if there weren't social media platforms? Would your life improve? What would you miss?
Answers
Answer:
I think it would improve because then people will be more interactive and social and everyone will be way more kind and I think its just way better in every way be social media is addicting to people. do yee. =)
Answer:
It will improve
Explanation:
Because the the citizen will be more caring to other things. I think there isn't a thing that we would miss
.
Equal opportunity gives everyone the same chance to succeed. Joe's Toy Store is looking for a new manager. Which of the following scenarios would be permitted by this law?
All applicants must be men.
All applicants must have a master's degree.
All applicants must be younger than forty years old.
All applicants must be white.
Answers
100 POINTS!!
Could the price controls on bread have been avoided in some prudent way?
Answers
The price controls on bread has not been avoided because Maximum price is reduced on the price of food to make it more affordable, but the limitation is maximum price may lead to less supply in shortage.
What do you mean by Price control?Price controls are those restrictions which was imposed by governments to ensure that the goods and services remain affordable to consumers.
Prices assigned scarce resources. Price controls distort those signals, leading to the inefficient allocation of goods and services. Proper fiscal and monetary policies can reduce inflation without costs imposed by price controls.
Their are many negative effects of price control. By having shortage, they cause people to wait, sometime they cause the quality of products whose prices are controlled to fall, and they can lead to partiality by suppliers.
Therefore, The price controls on bread can not been avoided.
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assume that a bakery hires more workers and pays them wages and that the workers produce more bread. gross domestic product (gdp) increases in all of these cases except when the bread
a. ia sold to households
.B)is stored away for later sale.
C)grows stale and is thrown away.
D)is sold to other firms.
Answers
Assuming that a bakery hires more workers and pays them wages and that the workers produce more bread, gross domestic product (GDP) increases in all of these cases except when the bread is stored away for later sale. Option (B) is the correct answer.
What is Gross Domestic Product (GDP)? Gross domestic product (GDP) is the value of all finished goods and services produced in a country during a given time frame. It is the most commonly used economic measure for evaluating an economy's output.
The following are some of the key components of GDP:
Consumption of households Investment made by firms Government expenditures Net exports (exports minus imports)
In economics, the following factors contribute to GDP: personal consumption, investments, government expenditures, and net exports.
Therefore, whenever the bread is sold to households, other firms, or gets stale and is thrown away, it contributes to the GDP. But when the bread is stored away for later sale, it does not contribute to GDP.
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Sally owns a $1,000-par zero-coupon bond that has six years of remaining a. What is the expected price of the bond at the time of sale?
Answers
Answer:
$647.96
Explanation:
Sue the following formula to calculate the price of the bond at the time of sale
Price of Bond = Face value of the bond / ( 1 + Market interest rate )^numbers of years
Where
Face value of bond = $1,000
Market interest rate = 7.5%
Numbers of years = 6 years
placing values in the formula
Price of Bond = $1,000 / ( 1 + 7.5% )^6
Price of Bond = $647.96
Devon was surprised that his pay check was less than he had expected. His
paycheck was reduced because
had been withheld by his employer.
OA. incentives
B. commissions
C. gross pay
OD. deductions
Answers
The answer is C. Gross pay. Devon's paycheck was reduced because it had been withheld by his employer as gross payment.
"Gross pay" mean?Before any taxes, benefits, or other payroll deductions are done , an employee's gross salary is what they are paid. Net pay, often known as take-home pay, is the amount that is given after all withholdings have been taken into consideration.
Calculate my gross pay?Start by determining the total amount need for each pay period in order to see an employee's gross compensation. Hourly workers multiply their total hours worked by their hourly rate, plus any overtime. Employees on a salary split their yearly earnings by the number of pay periods.
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Zachary, a college student, watches a financial show on television. The host is a well-known financial advisor. He is talking about borrowing from a 401 (k). This information is _____.
Answers
Answer:
This information will be "Reliable but irrelevant".
Explanation:
The knowledge and details seem to be accurate because he's such a possibly the best-known financial consultant even though it's meaningless because whatever he's concerned about benefits Zach as something of a student of the university. The narrator may be an extremely poorly-known financial planner, but Zachary certainly doesn't have to borrow from some kind of 401(k).surf's up corporation is interested in improving the effectiveness of their advertising for their latest surfboard equipment. they began a few years ago by advertising in widely circulated magazines such as maxim and sports illustrated. more recently, surf's up is placing their ads in longboarder magazine and surf guide. their change of promotional strategy has been from:
Answers
The promotional strategy Mass media advertising to targeted or niche media advertising.
This change in advertising strategy is a way for Surf's Up Corporation to reach their target audience more effectively. By advertising in magazines that cater specifically to surfers and longboarders, they are able to reach people who are more likely to be interested in their surfboard equipment. This approach is often more cost-effective and can lead to higher engagement and conversion rates compared to mass media advertising, where the message may get lost among a broader and less relevant audience.
By targeting their advertising to the niche audience, Surf's Up Corporation can also establish themselves as experts in the field and build a stronger connection with potential customers. This can lead to greater brand recognition and loyalty, helping the company to grow and succeed in the long term.
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which of the following is performed during the support phase of the pr execution
a)monitoring and controlling
b)building deliverables
c)conducting reviews
d) All of these
Answers
Conducting reviews involves evaluating and assessing the effectiveness of the plan to understand if it is achieving its goals. Therefore, All of these is the correct answer.
The correct option is D) All of these
PR execution or Public Relations execution includes several phases such as Planning phase, Implementation phase, and Support phase. Support Phase includes monitoring and controlling, building deliverables, and conducting reviews. Hence, option D, i.e. All of these is correct.As the name suggests, the support phase provides support to the previous phases such as planning and implementation. The support phase is the third and final phase of PR execution. In this phase, the execution of the plan starts to happen.
It is critical to monitor and control the activities of PR to ensure that the plan is on track and budget. Building deliverables refers to creating and distributing materials to reach the target audience. Conducting reviews involves evaluating and assessing the effectiveness of the plan to understand if it is achieving its goals. Therefore, All of these is the correct answer.
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Petra is the chief executive officer of the logistics company she reviews her company‘s financial statement regularly when making decisions about further expansion plans how would you categories Petra
Answers
Answer:
Explanation:
Clarification: Accounting is separated into two sections
Section 1: Financial Accounting: The monetary bookkeeping identifies with the planning of the asset report and other fiscal summaries like accounting report, benefit and misfortune record and income. The essential clients are leasers, speculators for these fiscal summaries.
Section 2: Managerial Accounting: The administrative bookkeeping gives data about monetary and money related data for supervisors and other inward clients. They are more adaptable as is required for the board basic leadership. The essential clients are workers, CEOs, and friends' administrators.
Petra is a CEO of coordinations division, consequently falls into administrative bookkeeping clients.
Answer:
B.) Internal User
ethical considerations in research are typically quite evident. true/False
Answers
False.
Ethical considerations in research may not always be obvious or clear, and researchers must take steps to carefully consider ethical issues throughout the entire research process. Ethical considerations in research include protecting the privacy and confidentiality of research participants, obtaining informed consent from participants, minimizing potential harm or discomfort to participants, ensuring that vulnerable populations are protected, and avoiding conflicts of interest.
In some cases, ethical considerations may be complicated by conflicting values or interests. For example, a study that involves potentially sensitive information or controversial topics may raise questions about the balance between the benefits of the research and the risks to the participants or the broader community.
It is essential for researchers to remain aware of ethical considerations throughout the research process, and they should seek guidance from institutional review boards (IRBs) or other ethics committees as needed. Additionally, researchers should be transparent about their methods and findings, and they should be willing to address any ethical concerns that arise during the course of their research.
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Last week, when Mr. Wyatt filled his car with gas the odometer reading was 8,572. When he next filled it, the reading was 8,832. If the car took 13 gallons of gas during the second fill-up (which means the car used 13 gallons between the fill-ups!), what was the car’s average gas mileage between the fill-ups?
Answers
20 miles per gallon, was the car’s average gas mileage between the fill-ups.
We must figure out how far the car travelled between the two fill-ups and divide that number by the amount of gas it consumed during that period in order to arrive at the automobile's average gas mileage.
The distance between the two fill-ups was 8,832 minus 8,572 miles, or 260 miles. During that time, 13 gallons of petrol were consumed. As a result, the vehicle's average fuel efficiency throughout the course of the fill-ups was 20 miles per gallon (260 miles / 13 gallons).
As a result, the significance of the gas mileage between the fill-ups are the aforementioned.
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Select the examples of workers commonly found in Business, Management, and Administration work environments. Check all that apply.
C folds clothing in a department store.
S leads a meeting in a private conference room.
Jr works in a private office on a computer.
L sets up sound and camera equipment in a theater.
T sits at a desk and answers telephone calls and e-mails.
J measures distances on a construction site.
Answers
Answer:
2, 3, 5
Explanation: your welcome, love.
Every Business, Management, and Administration work employee are the persons work in the office do the paper work and mange all operational and financial work of the organization . Hence option C ; S ; T are correct options
Who is Management and Administration worker ?An administrative employee is someone who oversees other workers who are members of another trade union and who typically work in office administration, construction, security, or maintenance.
Employees who have a common interest with "supervisors" are included by this definition. A general manager, business manager, administrator, director, or other person who has operational or managerial control over, or who directly or indirectly manages, the day-to-day operations of a facility, organization, or agency is referred to as a managing employee.
Management is a methodical approach to controlling individuals and resources within an organization. The act of running the entire organization by a group of people is referred to as the administration.
Planning, coordinating, and coming up with solutions to streamline administrative systems and procedures appointing duties and office space, as well as hiring and training staff.
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What are Logistics careers?
Answers
which type of learning involves reading a text to learn languages, business etiquette, and the history of a country?
Answers
The type of learning which involves reading a text to learn languages, business etiquette, and the history of a country is known as academic learning.
What is academic learning?Academic learning is a type of learning that occurs in academic settings, such as schools or universities, and is frequently linked with advanced or higher-level education.
It is the learning that is required for students to progress to the next level of their education, whether it be from one grade level to the next, from high school to college, or from college to a higher degree.
Acquiring a new skill is an example of academic learning. Reading a book on history to improve your knowledge of a country is another example. This type of learning is linked to the traditional classroom environment, which emphasizes reading, writing, and the acquisition of new knowledge.
Academic learning occurs in a controlled and structured environment, and it is assessed and evaluated by teachers or other qualified instructors.
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What does it mean when the irs accepts your tax return.
Answers
Answer:
it means that they have reviewed your return, and it has passed their initial inspection.
Explanation:
How does M&S keep existing customers happy?
Answers
Answer:
Im not sure
Explanation: