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Question: bettinger airlines is proposing to go public and you have...

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90 minutes to complete the quiz and it must be completed in one sitting. Once you le to pause the timer. In order to complete in the allotted time, you should plan to tes per question. Question 15 Bettinger Airlines is proposing to go public, and you have been given the task of estimating the value of its equity. Management plans to maintain debt at 40% of the companys present value, and you believe that at this capital structure the company debtholders will demand a return of 59 and stockholders will require 12%. The company is forecasting that next years operating cash flow (depreciation plus profit after tax at 35%) will be $50 million and that investment expenditures will be $20 million. Thereafter, operating cash flows and investment expenditures are forecast to grow in perpetuity by 4.5% a year. What is the total value of Bettinger Airlines (in millions)? Previous Next Not saved Submit
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