Please answer the whole questions, not just 1 1.Tropetech Inc. has an expected net operating profit...

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Please answer the whole questions, not just 1
1.Tropetech Inc. has an expected net operating profit aftertaxes, EBIT(1 – T), of $1,200 million in the coming year. Inaddition, the firm is expected to have net capital expenditures of$180 million, and net operating working capital (NOWC) is expectedto increase by $15 million. How much free cash flow (FCF) isTropetech Inc. expected to generate over the next year?
a. $18,490 million
b. $1,365 million
c. $1,035 million
d. $1,005 million
2. Tropetech Inc.’s FCFs are expected to grow at a constant rateof 4.62% per year in the future. The market value of TropetechInc.’s outstanding debt is $4,894 million, and its preferredstocks’ value is $2,719 million. Tropetech Inc. has 225 millionshares of common stock outstanding, and its weighted average costof capital (WACC) equals 13.86%.
Term
Value (Millions)
Total firm value
Intrinsic value of common equity
Intrinsic value per share
Using the preceding information and the FCF you calculated inthe previous question, calculate the appropriate values in thistable. Assume the firm has no nonoperating assets.

Term	Value (Millions)
Total firm value
Intrinsic value of common equity
Intrinsic value per share

Answer & Explanation Solved by verified expert

3.8 Ratings (398 Votes)

Answer 1Correct answer isd 1005 millionExplanationExpected FCF next year expected net operating profit aftertaxes expected to have net capital See Answer

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Please answer the whole questions, not just 11.Tropetech Inc. has an expected net operating profit aftertaxes, EBIT(1 – T), of $1,200 million in the coming year. Inaddition, the firm is expected to have net capital expenditures of$180 million, and net operating working capital (NOWC) is expectedto increase by $15 million. How much free cash flow (FCF) isTropetech Inc. expected to generate over the next year?a. $18,490 millionb. $1,365 millionc. $1,035 milliond. $1,005 million2. Tropetech Inc.’s FCFs are expected to grow at a constant rateof 4.62% per year in the future. The market value of TropetechInc.’s outstanding debt is $4,894 million, and its preferredstocks’ value is $2,719 million. Tropetech Inc. has 225 millionshares of common stock outstanding, and its weighted average costof capital (WACC) equals 13.86%.TermValue (Millions)Total firm value Intrinsic value of common equity Intrinsic value per share Using the preceding information and the FCF you calculated inthe previous question, calculate the appropriate values in thistable. Assume the firm has no nonoperating assets.