2. You are trying to value a subject company that has a September 1 fiscal year...
2. You are trying to value a subject company that has a September 1 fiscal year end. Today is May 9, 2019 and you are gathering all information TODAY to generate forecasts that will be used as valuation model inputs. Assume the subject company publishes its 10-K’s exactly 6 weeks after the fiscal year end and 10-Q’s exactly 2 weeks after the period end. How many quarters of activity must you forecast when estimating the annual net income that will be reported on the next published 10-K?
a. 1
b. 2
c. 3
d. 4
e. 5
Homework Answers
Since the company has a September 1 fiscal year end, it must close its books of accounts by 31st August
Today's date = 9 May, 2019
Hence, to arrive at the annual net income for this Fiscal Year, we are required to make projections for Quarter ending May 2019 & August 2019
Hence, we are required to make projections for 2 quarters of activity in order to estimate the Annual Net Income
Hence, correct answer is Option b = 2
Add Answer to:
2. You are trying to value a subject company that has a
September 1 fiscal year...
You are trying to value ListoFact, a data processing company. The company generated $1 billion in revenues in the most recent financial year and expects revenues to grow 3% per year in perpetuity. It...
You are trying to value ListoFact, a data processing company. The company generated $1 billion in revenues in the most recent financial year and expects revenues to grow 3% per year in perpetuity. It generated $30 million in after-tax operating income in the most recent financial year and expects after-tax operating margin to increase 1% per year starting from the current year (Year 0) to year 3. After year 3, the margin will stabilize at year 3 levels forever. The...
18 5 points You are trying to estimate the value of the XYZ Inc. company, as...
18 5 points You are trying to estimate the value of the XYZ Inc. company, as of the end of 2018. The after-tax cashflow from assets (FCFF) for the year ending 2018 is $145 million. The estimated WACC is 10%. What comes closest to the current value of the firm XYZ if the cashflow from assets are expected to grow at a constant rate of 2% in the future? O OOO 1849 million 1479 million 2113 million 1813 million 1450...
E5.13. Converting Analysts' Forecasts to a Valuation: Nike, Inc. (Medium) Nike reported book value per share...
E5.13. Converting Analysts' Forecasts to a Valuation: Nike, Inc. (Medium) Nike reported book value per share of $15.93 at the end of its 2008 fiscal year. Analysts were forecasting earnings of $3.90 per share for 2009 and $4.45 for 2010, and were also forecasting a five-year growth rate in EPS of 13 percent per year. Prepare a five-year pro forma of earnings based on these forecasts and convert the forecasts to a valuation with the added forecast that residual earnings...
48. It’s Friday, and you decide to save your change from your pockets each day for...
48. It’s Friday, and you decide to save your change from your pockets each day for the coming week and, take the amount each Friday to save in the bank. If you save $20 a week for 10 years at 6 percent interest? Assume the first payment occurs at the end of the first week and that there are exactly 52 weeks in a year, how much will you have saved in 10 years? 49. The Hippie Food Store is...
1) A company has recorded the demand for a new type of tire for the last...
1) A company has recorded the demand for a new type of tire for the last five months. Month 1 2 3 4 5 Demand ('00s) 14 17 19 23 24 a) Use a two month moving average to generate a forecast for demand in month 6. b) Apply exponential smoothing with a smoothing constant of 0.9 to generate a forecast for demand for demand in month 6. c) Which of these two forecasts do you prefer and why? 2)...
18 5 points You are trying to estimate the value of the XYZ Inc. company, as...
18 5 points You are trying to estimate the value of the XYZ Inc. company, as of the end of 2018. The after-tax cashflow from assets (FCFF) for the year ending 2018 is $145 million. The estimated WACC is 10%. What comes closest to the current value of the firm XYZ if the cashflow from assets are expected to grow at a constant rate of 2% in the future? O 0 0 0 0 1849 million 1479 million 2113 million...
1. 2 3 You are valuing a company that is projected to generate a free cash...
1.
2
3
You are valuing a company that is projected to generate a free cash flow of $10 million next year, growing at a stable 3.0% rate in perpetuity thereafter. The company has $20 million of debt and $8 million of cash. Cost of capital is 10.0%. There are 50 million shares outstanding. How much is each share worth according to your valuation analysis? Round to one decimal place. Numeric Answer: You are asked to value Gamecocks Inc. using...
Year Quarter Units 1 Q1 20 1 Q2 100 1 Q3 175 1 Q4 13 2...
Year Quarter Units 1 Q1 20 1 Q2 100 1 Q3 175 1 Q4 13 2 Q1 37 2 Q2 136 2 Q3 245 2 Q4 26 3 Q1 75 3 Q2 155 3 Q3 326 3 Q4 48 4 Q1 92 4 Q2 202 4 Q3 384 4 Q4 82 5 Q1 176 5 Q2 282 5 Q3 445 5 Q4 181 Using this data: a. Plot this data on a line chart with quarters from years 1-5 on...
If possible answer all. Most imporant are 2 and 3 1. A company is projected to...
If possible answer all. Most imporant are 2 and 3 1. A company is projected to have a free cash flow of $386 million next year, growing at a 5.1% rate until the end of year 3. After that, cash flows are expected to grow at a stable rate of 2.4%. The company's cost of capital is 11.9%. The company owes $93 million to lenders and has $14 million in cash. If it has 243 million shares outstanding, what is...
No need for explanation You are trying to compare two six year investment ideas; both ideas...
No need for explanation
You are trying to compare two six year investment ideas; both ideas require a $12,500 investment today (T-0). Investment A will grow to $50,000 at the end of year 6 (T-ó), while Investment B will grow to $25,000 at the end of year 6 (T=6). Estimate the annualized return for each investment using the Rule of 72, Next, find the Compound Annual Growth Rate (i.e. geometric average) for each investment, which we learned is more precise...
18 5 points You are trying to estimate the value of the XYZ Inc. company, as of the end of 2018. The after-tax cashflow from assets (FCFF) for the year ending 2018 is $145 million. The estimated WACC is 10%. What comes closest to the current value of the firm XYZ if the cashflow from assets are expected to grow at a constant rate of 2% in the future? O OOO 1849 million 1479 million 2113 million 1813 million 1450...
E5.13. Converting Analysts' Forecasts to a Valuation: Nike, Inc. (Medium) Nike reported book value per share of $15.93 at the end of its 2008 fiscal year. Analysts were forecasting earnings of $3.90 per share for 2009 and $4.45 for 2010, and were also forecasting a five-year growth rate in EPS of 13 percent per year. Prepare a five-year pro forma of earnings based on these forecasts and convert the forecasts to a valuation with the added forecast that residual earnings...
1) A company has recorded the demand for a new type of tire for the last five months. Month 1 2 3 4 5 Demand ('00s) 14 17 19 23 24 a) Use a two month moving average to generate a forecast for demand in month 6. b) Apply exponential smoothing with a smoothing constant of 0.9 to generate a forecast for demand for demand in month 6. c) Which of these two forecasts do you prefer and why? 2)...
18 5 points You are trying to estimate the value of the XYZ Inc. company, as of the end of 2018. The after-tax cashflow from assets (FCFF) for the year ending 2018 is $145 million. The estimated WACC is 10%. What comes closest to the current value of the firm XYZ if the cashflow from assets are expected to grow at a constant rate of 2% in the future? O 0 0 0 0 1849 million 1479 million 2113 million...
1.
2
3
You are valuing a company that is projected to generate a free cash flow of $10 million next year, growing at a stable 3.0% rate in perpetuity thereafter. The company has $20 million of debt and $8 million of cash. Cost of capital is 10.0%. There are 50 million shares outstanding. How much is each share worth according to your valuation analysis? Round to one decimal place. Numeric Answer: You are asked to value Gamecocks Inc. using...
No need for explanation
You are trying to compare two six year investment ideas; both ideas require a $12,500 investment today (T-0). Investment A will grow to $50,000 at the end of year 6 (T-ó), while Investment B will grow to $25,000 at the end of year 6 (T=6). Estimate the annualized return for each investment using the Rule of 72, Next, find the Compound Annual Growth Rate (i.e. geometric average) for each investment, which we learned is more precise...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 11 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 11 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 11 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 11 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 11 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 11 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 11 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 11 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 11 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 11 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 11 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 11 months ago