FIN 534 RANK Imagine Your Future /fin534rank.com FIN 534 RANK Imagine Your Future /fin534rank.com | Page 131
Last year’s sales = S0 $300.0 Last year’s accounts payable $50.0
Sales growth rate = g 40% Last year’s notes payable $15.0
Last year’s total assets = A0* $500.0 Last year’s accruals $20.0
Last year’s profit margin = PM 20.0% Initial payout ratio 10.0%
a. $31.9
b. $33.6
c. $35.3
d. $37.0
e. $38.9
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FIN 534 Week 7 Chapter 13 Solution
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Suppose Leonard, Nixon, & Shull Corporation’s projected free cash
flow for next year is $100,000, and FCF is expected to grow at a
constant rate of 6%. If the company’s weighted average cost of capital is
11%, what is the value of its operations?