Q1.: At the beginning of its fiscal year 2021, an analyst made the following forecast...
60.1K
Verified Solution
Link Copied!
Question
Finance
Q1.: At the beginning of its fiscal year 2021, an analyst made the following forecast for Generic Inc., the consumer foods company, for 20212023 (in millions of dollars):
2021F 2022F 2023F 2024F
Free cash flow to equity 1,714 1,677 1,653 1,637 holders
Use a required return of 9 percent. Assume that free cash flow will grow at 3 percent per year after 2024. Develop an Excel template to calculate the following:
a) present value of FCFE over 2021-2024.
b) present value of the terminal value of FCFE beyond 2024
c) total value of the firm
d) Generic had 369 million shares outstanding at the end of 2020, trading at $47 per
share. Calculate value per share.
e) Based on the given data, what should be the investment strategy?
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!
