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Author Question: Ted Corporation expects to generate free-cash flows of 200,000 per year for the next five years. ... (Read 65 times)

magmichele12

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on: Jul 10, 2018
Ted Corporation expects to generate free-cash flows of 200,000 per year for the next five years. Beyond that time, free cash flows are expected to grow at a constant rate of 5 percent per year forever.
 
  If the firm's average cost of capital is 15 percent, the market value of the firm's debt is 500,000, and Ted has a half million shares of stock outstanding, what is the value of Ted stock?
  A) 2.43
  B) 3.43
  C) 1.43
  D) 0.00

Question 2

The Rule of 72 is a rule of thumb for estimating the interest rate necessary to double your money, given a period of time.
 
  Indicate whether the statement is true or false.


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CAPTAINAMERICA

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Reply #1 on: Jul 10, 2018
Answer to Question 1

A

Answer to Question 2

Answer: TRUE


magmichele12

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Reply 2 on: Jul 10, 2018
Thanks for the timely response, appreciate it

scikid

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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