Purchase Solution

Enterprise value: SimpleCorp

Not what you're looking for?

Ask Custom Question

Analysts are forecasting that SimpleCorp will report free cash flow in the coming years as follows:

1: $45
2: $58
3: $40
4: $50
5: $60

In addition, analysts expect SimpleCorp shares to experience no multiple expansion or contraction and therefore to trade throughout the forecast an industry-standard Enterprise Value/Free Cash Flow (trailing) multiple of 12.0x. SimpleCorp reports a strong balance sheet, with cash of $50 and Debt outstanding of $150 and 100 shares outstanding.

If your required rate of return for equity investments of similar risk is 12%, what Enterprise Value would you place on SimpleCorp today and what Price per Share should you be willing to pay?

Purchase this Solution

Solution Summary

The solution examines the enterprise value for SimpleCorp. The price per share is determined.

Solution provided by:
Education
  • MBA, Indian Institute of Finance
  • Bsc, Madras University
Recent Feedback
  • "I've posted a similar question for another course. It's post 657940, and it's a practice problem that I'd like to use for the final exam. Your help will be greatly appreciated. "
  • "thank you!"
  • "Thank you again Jayant. You are super fast. "
  • "Thank you Jayant. You are appreciated. "
  • "Again, thank you Jayant. You are wonderful. "
Purchase this Solution


Free BrainMass Quizzes
Introduction to Finance

This quiz test introductory finance topics.

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.