Portage Bay Enterprises has $2 million in excess cash, no debt, and is expected to have free cash flow of $14 million next year. Its FCF is then expected to grow at a rate of 2% per year forever. If Portage Bay's equity cost of capital is 11% and it has 6 million shares outstanding, what should be the price of Portage Bay stock?

Answers

Answer 1

The price of portage bay stock should be approximately $25.

To determine the price of portage bay stock, we can use the gordon growth model, also known as the dividend discount model (ddm), which values a stock based on its future cash flows.

the formula for the gordon growth model is:

price = dividend / (cost of equity - growth rate)

in this case, we can consider the free cash flow (fcf) as the equivalent of dividends since the company has no debt and is expected to have constant fcf growth.

first, we need to calculate the perpetuity value of the fcf:

perpetuity value = fcf * (1 + growth rate) / (cost of equity - growth rate)

fcf = $14 million

growth rate = 2%

cost of equity = 11%

perpetuity value = $14 million * (1 + 0.02) / (0.11 - 0.02)

perpetuity value = $14 million * 1.02 / 0.09

perpetuity value = $154 million

next, we can calculate the price of portage bay stock by dividing the perpetuity value by the number of shares outstanding:

price = perpetuity value / number of shares outstanding

number of shares outstanding = 6 million

price = $154 million / 6 million

price = $25.67 per share 67 per share.

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Related Questions

The two most generous and politically popular social policy programs are – for health care and – for cash benefits, which primarily benefit –.

Answers

The statement can be completed this way:

The two most generous and politically popular social policy programs are Medicare for health care and Social security for cash benefits, which primarily benefit Senior citizens.

What are the most generous social policy programs?

The most generous social policy programs in the United States are the Medicare and Social Security programs. Medicare was introduced in the United States in the year 1965 and it was initially introduced as part of the Social Security program.

The individuals who this health care program is meant to target are old people who are up to 65 years. Some young individuals who also have some disabilities can also benefit from this program. People with end-stage renal diseases can also benefit from this program.

The social security program is another initiative that is meant to cater to cushion the effect that comes from a drop in earnings due to the retirement of old persons and individuals with a disability.

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Determine the interest on the following notes: (Round intermediate calculations and answers to 2 decimal places, e.g. 52.75.) (a) $2,000 at 6% for 90 days. $enter a dollar amount (b) $900 at 9% for 5 months. $enter a dollar amount (c) $3,000 at 8% for 60 days. $enter a dollar amount (d) $1,600 at 7% for 6 months.

Answers

The interest on the notes is as follows:
(a) $29.80
(b) $37.50
(c) $39.55
(d) $56.00

To determine the interest on the given notes, we can use the formula:

Interest = Principal × Rate × Time

(a) For the first note, we have:
Principal = $2,000
Rate = 6%
Time = 90 days

To calculate the interest, we convert the time to years by dividing 90 days by 365 (the number of days in a year):
Time = 90/365 ≈ 0.2466 years

Plugging in the values:
Interest = $2,000 × 0.06 × 0.2466

Calculating this, we find that the interest on the first note is approximately $29.80.

(b) For the second note, we have:
Principal = $900
Rate = 9%
Time = 5 months

Again, we need to convert the time to years by dividing 5 months by 12 (the number of months in a year):
Time = 5/12 ≈ 0.4167 years

Plugging in the values:
Interest = $900 × 0.09 × 0.4167

Calculating this, we find that the interest on the second note is approximately $37.50.

(c) For the third note, we have:
Principal = $3,000
Rate = 8%
Time = 60 days

Converting the time to years:
Time = 60/365 ≈ 0.1644 years

Plugging in the values:
Interest = $3,000 × 0.08 × 0.1644

Calculating this, we find that the interest on the third note is approximately $39.55.

(d) For the fourth note, we have:
Principal = $1,600
Rate = 7%
Time = 6 months

Converting the time to years:
Time = 6/12 = 0.5 years

Plugging in the values:
Interest = $1,600 × 0.07 × 0.5

Calculating this, we find that the interest on the fourth note is approximately $56.00.

In summary, the interest on the notes is as follows:
(a) $29.80
(b) $37.50
(c) $39.55
(d) $56.00

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Which of the following is NOT a problem caused by monopolies?
Select one:

Low quality

Fewer new products

Poor customer service

More competition

Answers

Answer:

Poor customer service

Explanation:

Poor customer service

A problem that is not caused by monopolies is More competition.Thus the correct answer is D.

What is a monopoly?

A monopoly refers to a situation when the market of particular goods and services is captured by a single entity or owner and restricts entry by controlling the activities.

They aim at limiting the amount produced for the market, which leads to charging more. This results in cutting back on economic welfare and consumer surplus.

As they are the single seller in the market which shows that there is no competition in the market, who challenges them. The problem of more competition is not caused by monopoly.

Therefore, Option D is appropriate.

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Which of the following is NOT an example of a metric
?

Answers

Answer:

can you tell me what the choices are and I'll answer in the comments

Explanation:

floor gang aooh sub to pewdiepie

State 5 advantages and 5 disadvantages of trade union.

Answers

Answer:

Down below

Explanation:

Advantages: 1-Unions can bargain for higher wages. 2-Unions can represent workers. 3-A trade union can help a firm bring in new working practices. 4-Unions can help bring workers closer to management. The states higher wages increase motivation.

Disadvantages: 1-Unemployment. 2-cost push inflation. 3-Time lost to strike.

4-confrontation 5-Less relevant.

According to Marx and Engels, the economic mode of production forms the _____. Other institutions form the _______.

Answers

Answer:

infrastructure; superstructure

Explanation:

quizlet

When a firm uses an established brand to introduce a new product, it is called a brand ________.
A) harmonization
B) valuation
C) extension
D) positioning
E) parity

Answers

When a firm uses an established brand to introduce a new product, it is called a C) brand extension.

This process involves leveraging the equity and recognition of an established brand to introduce a new product to the market, with the aim of benefiting from the existing brand awareness and customer loyalty.

The goal is to achieve brand harmonization, whereby the new product aligns with the existing brand's values and positioning to create a cohesive brand identity. So the new product will attract quicker customer awareness and the willingness to trial or sample the product due to association with parent brand.

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Suppose 10-year t-bonds have a yield of 5.30% and 10-year corporate bonds yield 6.75%. Also corporate bonds have a 0.25% liquidity premium versus 0 liquidity premium for T-bonds and the maturity risk premium on both treasury and corporate 10-year bonds is 1.15%. What is the default risk premium on corporate bonds?

Answers

Answer:

1.20%

Explanation:

Calculation for What is the default risk premium on corporate bonds

Using this formula

Default risk premium=Corporate yield-T-bond yield-LP, corporate bond only

Let plug in the formula

Default risk premium=6.75%-5.30%-0.25%

Default risk premium=1.20%

Therefore the default risk premium on corporate bonds is 1.20%

Which option best describes the main behavior that economics studies?
O A. People creating different governments around the world
O B. People participating in a traditional musical performance
O C. People experiencing the physical symptoms of a disease
O D. People making choices based on their limited resources
They

Answers

Answer:

D

Explanation:

Economist are known as people who manage resources base on the quantity of resources available

Answer:

D

Explanation:

Economics is the study of unlimited wants and limited resources.

Apparels is lndias second largest manufacturer of branded lifestyle apparel the company now plans to diversify into personal care segment by launching perfumes hair care and skin are produced moreover it is planning to open ten exclusive retail outlets in various cities across the in context of the above case

Answers

Answer:

Analyzing the information about Apparels, it is correct to state that the company is developing a strategic business expansion plan, with the aim of opening ten new exclusive retail stores in different cities and expanding its product lines by entering the segment of personal care with perfume lines and hair and skin care products.

Apparels' strategy is advantageous for companies consolidated in the market, which already have a good brand positioning and intend to conquer new market shares with the creation of new product lines. This can increase the company's profitability and market power, but the expansion strategy requires fixed capital capacity and capital management so that the strategies are carried out in accordance with the company's planning and the new costs of opening new stores and production, dissemination and distribution of new products.

Infinity times Infinity

Answers

Answer:

I think its just infinity

Answer:

Infinity

Explanation:

Imagine that you are on vacation and eat a chicken enchilada at a restaurant. Hours after eating the enchilada, you become violently ill. For years after that incident, you might be unable to bring yourself to eat a chicken enchilada and may even feel queasy when you smell foods that remind you of that particular dish. What accounts for the nausea you feel now when you smell a chicken enchilada?.

Answers

A person is caught stealing and is taken to jail. Those that saw the person steal and receive a penalty learn vicariously that stealing brings a negative consequence.

A positive penalty is once you add a consequence to unwanted behavior. You are doing this to create it less appealing. An example of a positive penalty is adding a lot of chores to the list once your kid neglects their responsibilities.

There area unit several samples of negative penalties in lifestyle. Losing privileges, being penalized for violating the law, being grounded and losing access to the pill area unit are all common negative penalty examples.

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which country leads the world in coal production and consumption by extracting and consuming approximately half of the world's annual coal yield?

Answers

China accounts for nearly half of the world's coal consumption ,with production reaching 3,942 million tonnes, a 2.5% growth.

Why is coal consumption increasing?

Global coal demand this year will be supported by rising natural gas prices as many countries step up their switch from gas to coal, and economic growth in India.

So why is so much coal being burned?

The first reason is that you have to keep the lights on. With a growing population of 1.4 billion now, India's electricity consumption is growing rapidly. According to the International Energy Agency, India will need to add production capacity equivalent to all of the EU's output over the next 20 years.

Why can't India live without coal despite its negative impact on the environment?

India is a key energy source that provides over 70% of the developing world's energy and 4 million jobs. The people of the coal-rich states are still struggling with water scarcity and pollution, yet are not going to be left behind.

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NEED HELP ASAP 10 POINTS
The production, purchase, and sale of goods in a world-wide market is known as the _____.

Answers

Answer:

I think it's global economy

Choose all items that represent characteristics of a resume:

is a summary career portfolio data

is the same thing as a career portfolio

is not used for a job application

is typically organized by jobs or skills

is ideally one or two pages in length

Answers

It should be b I believe

Answer:

is a summary career portfolio data

is typically organized by jobs or skills

is ideally one or two pages in length

is the same thing as a career portfolio

Explanation:

HOPE THIS HELPS! :)

The best reason to record income at the top of a budget is
a. to easily add expenses to it.
b. to know how much money is available.
c. to avoid spending too much money.
d. to see that is is more important than expenses.

Answers

A. To easily add expenses to it

B) To know how much money is available.

You can clearly see how much money you have available to spend or save by listing revenue at the top of a budget.

Making judgments on how to divide your money and prioritize your expenses requires knowledge of this information.

You may see how much money is available to cover your bills, pay off debts, and save for the future by putting revenue at the top of your budget.

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jonesville produces widgets an gadgets, and its ppc is linear. it takes 5 hours of labor to produce a gadget and 10 hours of labor to produce a widget. suppose that jonesville has 100 hours of labor. what is the maximum number of widgets it can produce?

Answers

20 widgets

What is widgets?

A software widget is an application or component designed for one or more software platforms that is quite straightforward and simple to use. A desk tool or applet is an illustration of a straightforward, standalone user interface, as opposed to a more intricate application like a spreadsheet or word processor.

In order to quickly access specific information from apps without having to launch the program itself, widgets can be placed to your phone's home screen. The Calendar widget is one example, which provides you with a quick glance of the events on your calendar without requiring you to open the Calendar application.

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A company's mission statement typically addresses which of the following questions?
Who are we, what do we do, and why are we here?

Answers

Yes, a company's mission statement typically addresses the following questions:

Who are we?  The company's identity is outlined in this section of the mission statement, highlighting its core values, culture, and occasionally its history. It might also include details about the size, scope, and location of the business.

What do we do? The company's products, services, or solutions are described in this section. It explains the organization's fundamental exercises and specialized topics, illustrating what separates it from contenders.

What are we doing here? This part of the statement of purpose conveys the organization's motivation or justification behind presence. It emphasizes the broader impact or value that the company aims to create for its stakeholders—customers, employees, communities, or the entire world—in addition to its financial objectives.

By resolving these inquiries, a statement of purpose gives an unmistakable and succinct assertion of the organization's general mission, directing its essential choices, course, and activities.

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Indicate whether each of the following accounts would be reported on the balance sheet or income statement of Home Repair Company. Further, if the account is reported on the balance sheet, indicate whether it would be classified with current assets, noncurrent assets, current liabilities, noncurrent liabilities, or stockholders' equity. If the account is reported on the income statement, indicate whether it would be classified as revenue or expense. Finally, for each account, indicate whether the company's accounting records would normally show a debit or credit balance.


Accounts: Financial Statement Classification Normal Debit or Credit


Interest Expense

Prepaid Rent

Amortization Expense

Unearned Revenue

Retained Earnings

Accumulated Depreciation

Answers

The accounts provided will be categorized and classified based on whether they are reported on the balance sheet or income statement of Home Repair Company.

Additionally, the classification within the balance sheet as current assets, noncurrent assets, current liabilities, noncurrent liabilities, or stockholders' equity will be indicated. Finally, the normal debit or credit balance for each account will be determined.

1. Interest Expense: This account is reported on the income statement as an expense. It will have a normal debit balance.

2. Prepaid Rent: This account is reported on the balance sheet as a current asset since it represents a payment made in advance for future rent. It will have a normal debit balance.

3. Amortization Expense: This account is reported on the income statement as an expense. It will have a normal debit balance.

4. Unearned Revenue: This account is reported on the balance sheet as a current liability since it represents revenue received in advance. It will have a normal credit balance.

5. Retained Earnings: This account is reported on the balance sheet as part of stockholders' equity. It represents the accumulated profits of the company and will have a normal credit balance.

6. Accumulated Depreciation: This account is reported on the balance sheet as a contra-asset account, specifically under noncurrent assets. It represents the accumulated depreciation of the company's fixed assets and will have a normal credit balance.

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your landscaping company can lease a truck for $8,200 a year (paid at year-end) for 5 years. it can instead buy the truck for $35,000. the truck will be valueless after 5 years. the interest rate your company can earn on its funds is 6%. what is the present value of the cost of leasing? note: do not round intermediate calculations. round your answer to 2 decimal places. is it cheaper to buy or lease? what is the present value of the cost of leasing if the lease payments are an annuity due, so the first payment comes immediately? note: do not round intermediate calculations. round your answer to 2 decimal places. is it now cheaper to buy or lease?

Answers

The present value of the cost of leasing with an annuity due is $36,629.99. Comparing this value to the cost of buying the truck at $35,000, it is more cost-effective to buy the truck rather than lease it.

To calculate the present value of the cost of leasing, we can use the formula for present value of an annuity:

PV = PMT * [(1 - (1 + r)^(-n)) / r]

where PV is the present value, PMT is the annual payment, r is the interest rate, and n is the number of years.

For the given leasing cost of $8,200 per year for 5 years, the present value of leasing is:

PV = 8200 * [(1 - (1 + 0.06)^(-5)) / 0.06]
  = 8200 * [(1 - 0.74726) / 0.06]
  = 8200 * (0.25274 / 0.06)
  = 8200 * 4.21233
  = $34,529.10

Therefore, the present value of the cost of leasing is $34,529.10.

Comparing the cost of leasing ($34,529.10) to the cost of buying ($35,000), it is cheaper to lease the truck.

Now, let's calculate the present value of the cost of leasing if the lease payments are an annuity due. An annuity due means the first payment comes immediately.

Using the same formula as before, the present value of the cost of leasing with an annuity due is:

PV = PMT * [(1 - (1 + r)^(-n)) / r] * (1 + r)

Substituting the values:

PV = 8200 * [(1 - (1 + 0.06)^(-5)) / 0.06] * (1 + 0.06)
  = 8200 * [(1 - 0.74726) / 0.06] * 1.06
  = 8200 * (0.25274 / 0.06) * 1.06
  = 8200 * 4.21233 * 1.06
  = $36,629.99

Therefore, the present value of the cost of leasing with an annuity due is $36,629.99.Comparing this cost to the cost of buying ($35,000), it is now cheaper to buy the truck.

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1) help tom to explain to the shareholders of the company the meaning of "free cash flow", its usage and how to use its value to assess a company’s performance.

Answers

Free cash flow" refers to the amount of cash a company generates from its operations that is available for distribution to shareholders, debt repayment, or reinvestment in the business.

It is a crucial financial metric used to assess a company's performance and financial health. When explaining to shareholders, Tom can emphasize that free cash flow represents the company's ability to generate cash beyond its necessary expenses and capital investments. It serves as an indicator of financial strength and flexibility. Shareholders can use free cash flow to evaluate the company's ability to pay dividends, reduce debt, invest in growth opportunities, or withstand economic downturns. By analyzing trends in free cash flow over time.

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On March 5 PV Inc purchased $3,300 worth of merchandise from Panther Supply with the terms 2/10,n/30 On March 14, PV Inc paid Panther Supply the amount owed less the discount. Show the journal entry for March 5 and March 14 a

Answers

I need help on my question

What types of loans are available to consumers?

Answers

Explanation:

Credit Cards: That used fund daily transactions by customers.

Car Loans: That used fund the purchasing of a car by customers.

Private loans: Used mostly by borrowers for school funding.

Personal Loans: Being used personal usage by customers.

Jean-Baptiste Say thought that entrepreneurs should be considered a fourth factor of production. Do you agree or not? Explain your reasoning.

Answers

Answer: i do agree

Explanation: they are a factor because they help the economy in the same ways as the other factors of production

Jean-Baptiste Say thought that entrepreneurs should be considered a fourth factor of production. The given statement is true. Because of the economy in the same ways as the other factors of production.

What is the economy?

An economy is a collection of interconnected production and consumption processes that ultimately decide how resources are distributed within a community. The demands of persons who live there and conduct business there are met by the production and consumption of goods and services as a whole.

The traditional economy, which uses a country's traditions and history to direct the production and distribution of goods, is a well-known illustration of an economy. The main pillars of traditional economies are agriculture, fishing, and hunting.

Entrepreneurs should be considered a fourth factor of production labor, capital, natural resources, and entrepreneur.

Therefore, By the given statement(Jean-Baptiste Say thought that entrepreneurs should be considered a fourth factor of production) was true.

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Marcus set a goal to buy a used car in the next few months. He plans to make a $2,500
down payment and has already saved $1,300. If he can save $150 each month for this goal
to buy a car, how long will it take him to save the entire $2,500?

Answers

I believe that it will take Marcus 8 months to save 2,500 since he already has 1,300 if you subtract that from 2,500 you get 1,200 and 150 x 8 = 1,200

Identify the problem by analyzing the given scenario. An IT software company is losing market share because it fails to launch new products in a timely manner. Decisions are centralized at the top, and employees have little or no voice. One way to solve this problem is to use teams to eliminate ____ in the company.​

Answers

Explanation:

to eliminate their best efforts in the company

Answer:

"bureaucratic barriers"

Explanation:

i got it right on plato

What happens to quantity supplied when price is lowered?

Answers

A price increase almost always results in more of that good or service being supplied, whereas a price decrease usually results in less of it being supplied. The quantity supplied increases as the price rises.

Generally speaking, decreased supply results from lower prices. Prices that are higher encourage producers to produce more of the good or commodity, assuming that their costs aren't rising as quickly. A cost squeeze brought on by lower prices restricts supply. The likelihood of suppliers producing more increases with price. On the other hand, the cheaper a product is, the more people tend to buy it.

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in terms of the community of stakeholders outside the organization, the faa is in boeing’s ______ environment.

Answers

In terms of the community of stakeholders outside the organization, the FAA is in boeing’s task environment.

What is the boeing’s task environment?

Environmental sustainability, global & community engagement, and diversity & inclusion are the three main areas where Boeing Corporate Social Responsibility programs are focused on, which help in fostering social and environmental sustainability.

Therefore, in terms of the community of stakeholders outside the organization, the faa is in boeing’s task environment.

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The interest rate before taking inflation into account is called the: O A. annual percentage yield. OB. nominal interest rate. OC. effective rate. OD. real interest rate.​

Answers

The interest rate before taking inflation into account is called the nominal interest rate. The Option B is correct.

What does nominal interest rate means?

The interest rate before inflation is referred to as the nominal interest rate. The federal funds rate is the short-term nominal interest rate set by the Federal Reserve that serves as the foundation for other interest rates charged by banks and financial institutions.

It is the stated interest rate paid or earned by the lender or investor to the lender. So, if you borrow $100 at a 6% interest rate, you can expect to pay $6 in interest. The rate has been raised to account for inflation. Central banks set short-term nominal interest rates.

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Donald Trump wanted to pull us out of the WTO because he thought China was cheating. Would you stay in or leave?

Answers

Answer: I hate Trump and would make him eat tortilla chip vertically :/

Explanation:

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Is -71/80 rational??????? Factor completely18x3 + 81x - 27 some one broke into the shop begin the shop in mitochondrial electron transport, what is the direct role of o2 ? view available hint(s)for part a in mitochondrial electron transport, what is the direct role of ? to provide the driving force for the synthesis of atp from adp and pi to provide the driving force for the production of a proton gradient to function as the final electron acceptor in the electron transport chain to oxidize nadh and fadh2 from glycolysis, acetyl coa formation, and the citric acid cycle Why does our knowledge of space increase with new technology? How do you define a party system? The Wildhorse Company has disclosed the following financial information in its annual reports for the period ending March 31, 2017: sales of $1.484 million, cost of goods sold of $803,000, depreciation expenses of $175,000, and interest expenses of $89,575. Assume that the firm has an average tax rate of 35 percent. Compute the cash flows to investors from operating activity. find the area of the parallelogram spanned by u= and v= A 16 foot ladder rests against a vertical wall. If the bottom of the ladder is pushed away from the wall at 3 ft/sec, how fast is the top of the ladder moving down the wall when the bottom is 9 feet from the wall Yoshio plotted a number on a number line. He wrote the following clues about the number he plotted: The number is an integer. The number lies to the left of 0 on the number line. The number is greater than -4. The opposite of the number is an even number. What is the number that Yoshio plotted? the dot plots below show the number of books that emma and mary read each month in last 18 months. on average, which girl read the most number of books each month? 3x2 +4x-5 = 5x2 + 2x +1 What type of wave moves the audio and visual signals?1. electromagnetic wave2. transmitter wave3. carrier wave4. image wave g Return on equity (ROE) measures the return to stockholders from their investment in equity. divides net income by (common stock + additional paid-in capital). divides net income by average total assets. divides owners' equity by total liabilities. What river crosses Paris France What does campaign mean *? Why do you think ANIMAL CELLS are able to survive without the types of cell walls that are present in nearly every other group of organisms? Provide 3 answers. Help I need to answer this in less than 20 minsss!!!! What growing problem in the Northwest Territory did the United States face? Pirates and militia were enforcing their own justice aimed at American Indians and settlers. American Indians in the area were mounting violent resistance to American settlement. Settlers were overwhelmingly in support of the US entering the war between France and Britain. French troops began to occupy outposts and establish forts in the Ohio River Valley. Ha the power of the Preident of the United State a Commander-in-Chief exceeded contitutional boundarie and hould thoe power be curtailed, given the contant tate of war we find ourelve in? Or hould the Preident military power continue to expand to addre the growing chao in our world, depite the Contitution or in congruence with the Contitution? Explain your anwer