Harvard Industries (an all equity firm with 12 million shares outstanding) revenues are expected to...
90.2K
Verified Solution
Link Copied!
Question
Finance
- Harvard Industries (an all equity firm with 12 million shares outstanding) revenues are expected to be $500 million next year and grow at 3 percent per year after that. Costs are 40 percent of revenues and depreciation is 20 percent of revenues. Net working capital is 2 percent of revenue and capital spending is 8 percent of revenues. The effective tax rate is 40 percent. A discount rate of 16 percent is appropriate for a company of this risk.
- What is the FCF for this firm in year 1? Show work.
- What is Harvards estimated price per share using the discounted FCF model? Show work.
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!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Best
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.