The following is a four-year forecast for Torino Marine. Year Free cash flow ($ millions) 2022 -46 2023 67 a. Fair market value b. Fair market value per share a. Estimate the fair market value of Torino Marine at the end of 2021. Assume that after 2025, earnings before interest and tax will remain constant at $200 million, depreciation will equal capital expenditures in each year, and working capital will not change. Torino Marine's weighted-average cost of capital is 10 percent and its tax rate is 30 percent. Note: Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place. X Answer is complete but not entirely correct. 421.5 million 13.60 XS $ 2024 84 b. Estimate the fair market value per share of Torino Marine's equity at the end of 2021 if the company has 31 million shares outstanding and the market value of its interest-bearing liabilities on the valuation date equals $210 million. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. 2025 106 The following is a four-year forecast for Torino Marine. Year Free cash flow (5 millions) 2022 -46 2023 2024 67 84 a. Estimate the fair market value of Torino Marine at the end of 2021. Assume that after 2025, earnings before interest and tax will remain constant at $200 million, depreciation will equal capital expenditures in each year, and working capital will not change. Torino Marine's weighted-average cost of capital is 10 percent and its tax rate is 30 percent. Note: Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place. Fair market value b. Fair market value per share i 2025 106 b. Estimate the fair market value per share of Torino Marine's equity at the end of 2021 if the company has 31 million shares. outstanding and the market value of its interest-bearing liabilities on the valuation date equals $210 million. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Answer is complete but not entirely correct. $ 421.5 million $ 13.60
The following is a four-year forecast for Torino Marine. Year Free cash flow ($ millions) 2022 -46 2023 67 a. Fair market value b. Fair market value per share a. Estimate the fair market value of Torino Marine at the end of 2021. Assume that after 2025, earnings before interest and tax will remain constant at $200 million, depreciation will equal capital expenditures in each year, and working capital will not change. Torino Marine's weighted-average cost of capital is 10 percent and its tax rate is 30 percent. Note: Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place. X Answer is complete but not entirely correct. 421.5 million 13.60 XS $ 2024 84 b. Estimate the fair market value per share of Torino Marine's equity at the end of 2021 if the company has 31 million shares outstanding and the market value of its interest-bearing liabilities on the valuation date equals $210 million. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. 2025 106 The following is a four-year forecast for Torino Marine. Year Free cash flow (5 millions) 2022 -46 2023 2024 67 84 a. Estimate the fair market value of Torino Marine at the end of 2021. Assume that after 2025, earnings before interest and tax will remain constant at $200 million, depreciation will equal capital expenditures in each year, and working capital will not change. Torino Marine's weighted-average cost of capital is 10 percent and its tax rate is 30 percent. Note: Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place. Fair market value b. Fair market value per share i 2025 106 b. Estimate the fair market value per share of Torino Marine's equity at the end of 2021 if the company has 31 million shares. outstanding and the market value of its interest-bearing liabilities on the valuation date equals $210 million. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Answer is complete but not entirely correct. $ 421.5 million $ 13.60
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Qw.15.
Transcribed Image Text:The following is a four-year forecast for Torino Marine. Year Free cash flow ($ millions) 2022 -46 2023 67 a. Fair market
value b. Fair market value per share a. Estimate the fair market value of Torino Marine at the end of 2021. Assume that after
2025, earnings before interest and tax will remain constant at $200 million, depreciation will equal capital expenditures in
each year, and working capital will not change. Torino Marine's weighted-average cost of capital is 10 percent and its tax rate
is 30 percent. Note: Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place. X
Answer is complete but not entirely correct. 421.5 million 13.60 XS $ 2024 84 b. Estimate the fair market value per share of
Torino Marine's equity at the end of 2021 if the company has 31 million shares outstanding and the market value of its
interest-bearing liabilities on the valuation date equals $210 million. Note: Do not round intermediate calculations. Round
your answer to 2 decimal places. 2025 106
The following is a four-year forecast for Torino Marine.
2022
-46
Year
Free cash flow (5 millions)
2023 2024
67 84
a. Estimate the fair market value of Torino Marine at the end of 2021. Assume that after 2025, earnings before interest and tax will
remain constant at $200 million, depreciation will equal capital expenditures in each year, and working capital will not change.
Torino Marine's weighted-average cost of capital is 10 percent and its tax rate is 30 percent.
Note: Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place.
2025
106
b. Estimate the fair market value per share of Torino Marine's equity at the end of 2021 if the company has 31 million shares.
outstanding and the market value of its interest-bearing liabilities on the valuation date equals $210 million.
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
Answer is complete but not entirely correct.
$ 421.5 million
$
13.60
s. Fair market value
b. Fair market value per share
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