Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. x=4 1. germinal corporation manufactures solar ce

x=4 1. Germinal Corporation manufactures solar cells for electric cars. As the company had...

80.2K

Verified Solution

Question

Finance

imagex=4

1. Germinal Corporation manufactures solar cells for electric cars. As the company had an acquisiton offer of $xx million dollars for the firm, Emile Zola (CEO of the company) wants to value the company himself. Due to the nature of the business, Zola expects supernormal growth in the first five years and beyond the 5th year firm will reach to stable growth. The supernormal growth rate is 1x%. The company expected to have the net income of $1000000, dividends of $400000 and the common equity of $10000000 in the 5th year financial statements. Last year's FCF (FCF0) is $x000000 and the WACC is 2x% throughout the life of the company. Suppose the company has $5000000 debt and has x million shares outstanding. a. Calculate the expected FCFs for the first five years. (5 pts) b. Calculate the sustainable stable growth rate. (5 pts) c. Calculate the horizon value for the years beyond the 5th year. (5 pts) d. Calculate the firm value of the company. (5 pts) e. Calculate the PPS of the company (5 pts) f. Evaluate whether he should accept the offer or not. (5 pts)

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

Programming
1.2K views

In this unit, you learned about some of the benefits of web-based applications. What are some...

Psychology
1.2K views

write a 3 page reflection paper on what you can do to prevent Alzheimer's

Accounting
1.2K views

create procedures you can use as a bookkeeper as part of your duties related to payroll. include...

Geometry
1.2K views

A baseball diamond is actually a square with sides of 90 feet If a runner...

Geometry
1.2K views

Determine the area of the parallelogram with vertices (2.7, 6), (5, 6, 5), (-7, 12....

Geometry
1.2K views

Use the Table command and the future value formula on Page 271 Page 305 2nd...

Geometry
1.2K views

Congruence Stmt Reason E U V W VA Y X 0 J gruence Stmt Congruence...

Basic Math
1.2K views

A particle moves along a line with a velocity v(t) = -4t + 2, measured...

Calculus
1.2K views

The goal of this problem is to evaluate Part 1 The Partial Fraction Setup 82...

Accounting
1.2K views

Given the following infromation of a company with three production...

Accounting
1.2K views

10 11 24 12 14 15 16 17 18 19 20 21 22 23 Moving...

Finance
1.2K views

Ance design company ended 2012 (began 2013) with inventory valued at $2,646,000 (specifically 12,600 units...