Business
Business, 22.07.2019 16:10, hernandezbrandon059

Cool cargo corporation is considering going public. managers want to estimate common stock value. cool cargo’s cfo has collected data for valuation using the free cash flow method as follows… the firm’s weighted average cost of capital is 10%, and it has $100,000 of debt at market value, and $200,000 of preferred stock also at market value. the estimated free cash flows over the next 5 years, 2017-2021, are given as follows: year estimated free cash flow 2017 $200,000 2018 $250,000 2019 $310,000 from 2019 to infinity, the firm expects free cash flow to grow at a rate of 3% per year. (a) estimate the value of cool cargo’s entire company using the free cash flow valuation model. (b) use your finding in part (a), along with the data provided above, to find cool cargo’s common stock value. (c) if the firm has 200,000 shares of common stock outstanding, what is its estimated value per common share? (d) cool cargo corporation is too small to immediately become part of the djia. how are stocks weighted in the djia? which index, djia, s& p 500, or nasdaq 100, is most representative of the u. s. stock market? (e) the above free cash flow estimates were based on the 2017 tax code (i. e., before the recent income tax cuts were passed). describe how you think the new corporate and personal income tax cuts passed by the trump administration and congress effective 2018 will or hurt cool cargo corporation stock price.

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