40 You have been asked to value AstraMonika, a...

90.2K

Verified Solution

Question

Accounting

40
image
image
image
You have been asked to value AstraMonika, a Biopharmaceutical company and have come up with the following inputs. . Base Year Information (2020) Earnings before interest and taxes in 2020 =$600 million Capital expenditures in 2020 = $120 million Depreciation in 2020 = $100 million Revenues in 2020 = $6,000 million Working capital as percent of revenues = 20% Tax rate = 40% . . High-Growth Phase Length of high-growth phase = 5 years Expected growth rate in FCFF=15% Beta = 1.30 Cost of debt = 8% (pre-tax) Debt ratio = 30% Risk-free rate = 7% Market Risk Premium (MRP) = 6% Stable-Growth Phase Expected growth rate in FCFF= 3% Beta = 1.5 Cost of debt =7% (pre-tax) Debt ratio = 25% Risk-free rate = 7% Market Risk Premium (MRP) = 6% 40 of 40 Suppose Astra Monika has 200 million outstanding shares and $1.5 billion in debt, what is the value of Astra Monika's stock based on this information? O A $17.99692 OB. $16.78265 OC. $16.23215 OD. $16.34872 E. None of the above Unsure You have been asked to value AstraMonika, a Biopharmaceutical company and have come up with the following inputs. . Base Year Information (2020) Earnings before interest and taxes in 2020 =$600 million Capital expenditures in 2020 = $120 million Depreciation in 2020 = $100 million Revenues in 2020 = $6,000 million Working capital as percent of revenues = 20% Tax rate = 40% . . High-Growth Phase Length of high-growth phase = 5 years Expected growth rate in FCFF=15% Beta = 1.30 Cost of debt = 8% (pre-tax) Debt ratio = 30% Risk-free rate = 7% Market Risk Premium (MRP) = 6% Stable-Growth Phase Expected growth rate in FCFF= 3% Beta = 1.5 Cost of debt =7% (pre-tax) Debt ratio = 25% Risk-free rate = 7% Market Risk Premium (MRP) = 6% 40 of 40 Suppose Astra Monika has 200 million outstanding shares and $1.5 billion in debt, what is the value of Astra Monika's stock based on this information? O A $17.99692 OB. $16.78265 OC. $16.23215 OD. $16.34872 E. None of the above Unsure

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students