Lemmon has EAT, depreciation expense, capital expenses and debt principal payments of $4m, $.2m, $.3m,...
70.2K
Verified Solution
Link Copied!
Question
Accounting
Lemmon has EAT, depreciation expense, capital expenses and debt principal payments of $4m, $.2m, $.3m, and $.5m respectively. Its roe in the market has been 12 %, and the risk free rate is .02. Between the first and the second years, it has current assets of $11m and $11.4m and current debts of $5m and $5.1m respectively. Its unlevered beta, D/E and t are 2, 60/40 and .25 respectively. Lemmons ROE is 20%, and it plows about 30% of its profits back into its business.
Derive the value of Lemmon.
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!
