Go Times Inc. has current sales of $7,500 (in millions), an operating ratio of 6%, a capital requirement ratio of 40%, a tax rate of 40% and a corporate cost of capital of 8%. Under new management sales are expected to grow 15% in Yr 1, 15% in Yr 2, 10% in Yr 3, 5% in Yr 4 and then grow at a constant rate of 4% after Yr 4.
In addition, the firm has the following balance sheet items: (000,000)
Short-term investments = $25
Short-term debt (notes payable) = $250
Long-term debt (bonds) = $300
Preferred stock = $30
Number of shares of common stock = 75 1.
What is the firm’s free cash flow at the end of Yr 1?
What is the firm’s horizon value at the end of Yr 4?
- $13,011.28
- $9,035.50
- $12,198.08
- $14,637.70
- $8,326.23
3. What is the firm’s total value today? Group of answer choices
- $10,312.54
- $9,669.57
- $12,308.94
- $11,598.48
- $11,228.96
4. What is the firm’s current equity value of price per share?
- $146.91
- $115.85
- $150.26
- $129.77
- $121.19
