A community for students.

Here's the question you clicked on:

55 members online
  • 0 replying
  • 0 viewing

anonymous

  • 5 years ago

Hi, I'm doing a problem on three stage FCFE valuation model: Here is the problem: The FCFE per share for the current year is $.75. The FCFE is expected to grow at 10% for the next year, the at 26% annually for the following three years, and then 6% in year 5 and thereafter. QuickChange's estimated beta is 2.00, and Mckibben believes that current market conditions dictate a 4.5 % risk-free rate return and a 5.0 percent equity risk premium. Given Mckibben's assuptions and approach estimate the value of share of QuickChange.

  • This Question is Closed
  1. anonymous
    • 5 years ago
    Best Response
    You've already chosen the best response.
    Medals 0

    i dont whether fcfe per share is $75 or $0.75. in case of $ 75 fcfe per share, price per share is $2074.94. fcfe 75 82.5 103.95 130.977 165.03102 174.9328812 discount rate 0.1 0.26 0.26 0.26 0.06 0.06 terminal value 2181.51593 pv of cashflow 0.75 75 65.47619048 82.5 82.5 138.5632267 1630.155608 price per share 2074.945025 in case of fcfe $0.75 per share, price per share is $ 21.41. fcfe 0.75 0.825 1.0395 1.30977 1.6503102 1.749328812 discount rate 0.1 0.26 0.26 0.26 0.06 0.06 terminal value 21.8151593 pv of cashflow 0.75 0.75 0.654761905 0.825 0.825 1.385632267 16.30155608 price per share 21.49195025 capm rf 0.045 b 2 rm-rf 0.05 ke 0.145

  2. anonymous
    • 5 years ago
    Best Response
    You've already chosen the best response.
    Medals 0

    just give me feedback on it when checked

  3. anonymous
    • 5 years ago
    Best Response
    You've already chosen the best response.
    Medals 0

    how did u calculate price per hare frm fcfe

  4. anonymous
    • 5 years ago
    Best Response
    You've already chosen the best response.
    Medals 0

    fcfe per share is $0.75 or $ 75. so you dont require to look for outstanding equity shares. you`ll directly derive price per share.

  5. Not the answer you are looking for?
    Search for more explanations.

    • Attachments:

Ask your own question

Sign Up
Find more explanations on OpenStudy
Privacy Policy

Your question is ready. Sign up for free to start getting answers.

spraguer (Moderator)
5 → View Detailed Profile

is replying to Can someone tell me what button the professor is hitting...

23

  • Teamwork 19 Teammate
  • Problem Solving 19 Hero
  • You have blocked this person.
  • ✔ You're a fan Checking fan status...

Thanks for being so helpful in mathematics. If you are getting quality help, make sure you spread the word about OpenStudy.

This is the testimonial you wrote.
You haven't written a testimonial for Owlfred.