Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. river enterprises has $501 million in debt and 20

River Enterprises has $501 million in debt and 20 million shares of equity outstanding. Its...

80.2K

Verified Solution

Question

Accounting

River Enterprises has $501 million in debt and 20 million shares of equity outstanding. Its excess cash reserves are $15 million. They are expected to generate $209 million in free cash flows next year with a growth rate of 2% per year in perpetuity. River Enterprises' cost of equity capital is 13%. After analyzing the company, you believe that the growth rate should be 3% instead of 2%. If the growth rate is 3%, the price per share is YYY(Round to the nearest cent.)
81.20
80.20
None of the answers mentioned
79.20
image

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!
Become a Member

Other questions asked by students

Q

What are the stages of a batch culture growth curve? Make sure you explain in full...

Biology
Q

Compare and contrast the set point model and the positive incentive model in terms of explaining...

Psychology
Q

What dose consequentialism means in few a few examples

Psychology
Q

Given functions m(x) = ?x+12 and p(x) = x - 5, state the domains of...

Calculus
Q

A trough full of water is 7 meters long 2 meters wide at the top...

Calculus
Q

1. Complete General Journal 2.Enter the month-end totals from the Cash Receipts journal. 3.Enter...

Accounting
Q

(a) Prepare the adjusting journal entry needed on December 31,2025. (b) Prepare the...

Accounting
Q

1. A company authorizes 8000 shares at a price of $6 each. The company issues...

Accounting
Q

The following transactions occurred during 2020. Assume that depreciation of 10% per year is charged...

Accounting
Q

Flatulence Inc. is computing its inventory at December 31,2023. The following information relates to the...

Accounting
Q

A firm that offers computerized tax preparation services to tax practitioners or the seller of...

Accounting
Q

Complete Problem 3 all sales and purchases involved cash. 1. Determine "gains...

Accounting