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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 % riskfree rate return and a 5.0 percent equity risk premium. Given Mckibben's assuptions and approach estimate the value of share of QuickChange.
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 % riskfree rate return and a 5.0 percent equity risk premium. Given Mckibben's assuptions and approach estimate the value of share of QuickChange.

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anonymous
 5 years ago
Best ResponseYou've already chosen the best response.0i 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 rmrf 0.05 ke 0.145

anonymous
 5 years ago
Best ResponseYou've already chosen the best response.0just give me feedback on it when checked

anonymous
 5 years ago
Best ResponseYou've already chosen the best response.0how did u calculate price per hare frm fcfe

anonymous
 5 years ago
Best ResponseYou've already chosen the best response.0fcfe per share is $0.75 or $ 75. so you dont require to look for outstanding equity shares. you`ll directly derive price per share.
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