Explore BrainMass
Share

Explore BrainMass

    Finance Integrative Case

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    See attachment to review but only need the 2 below:

    f. Track Software paid $5,000 in dividends in 2015. Suppose that an investor approached
    Stanley about buying 100% of his firm. If this investor believed that by
    owning the company he could extract $5,000 per year in cash from the company
    in perpetuity, what do you think the investor would be willing to pay for the firm
    if the required return on this investment is 10%?

    g. Suppose that you believed that the FCF generated by Track Software in 2015
    could continue forever. You are willing to buy the company in order to receive
    this perpetual stream of free cash flow. What are you willing to pay if you require
    a 10% return on your investment?

    © BrainMass Inc. brainmass.com October 10, 2019, 7:54 am ad1c9bdddf
    https://brainmass.com/business/finance/finance-integrative-case-599825

    Attachments

    $2.19