Ask Experts Questions for FREE Help !
Ask
    miska090's Avatar
    miska090 Posts: 3, Reputation: 1
    New Member
     
    #1

    Mar 14, 2012, 09:10 AM
    Value of the firm.
    The active message company has an after tax operating income of $10 million in its most recent year. It capital expenditures were 40% of operating income and the depreciation was 40% of the operating earnings. The operating earnings, capital expenditures and depreciation are expected to grow at 18% per year for the next three years. After that they are expected to grow at a sustainable growth rate, which is consistent with the firms ROC(return on capital) of 20% and it reinvestment rate of 40%. Assuming that the firm has a cost of capital of 10%, what is the value of the firm?

Check out some similar questions!

What is the firm WACC [ 1 Answers ]

1. The General Store has a cost of equity of 15.8 percent, a pre-tax cost of debt of 7.7 percent, and a tax rate of 32 percent. What is the firm's weighted average cost of capital if the debt-equity ratio is 0.40? A. 10.18 percent B. 11.72 percent C. 12.78 percent D. 13.30 percent E. 14.93...

Why small scale firm still exist in most large scale firm [ 1 Answers ]

Why small scale firm still exist in the most large scale firm

Audit firm [ 1 Answers ]

How do I find the Audit firm for a company? I am specifically looking for the Audit firm for Google. Thanks!


View more questions Search
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.