Stuart,Inc

question 102

Multiple Choice

Stuart,Inc.reported net income of $20 million for last year.Depreciation expense totaled $15 million and capital expenditures came to $5 million.Free cash flow is expected to grow at a rate of 6% for the foreseeable future.Stuart faces a 40% tax rate and has a 0.30 debt to equity ratio with $75 million (market value) in debt outstanding.Stuart's equity beta is 1.1,the risk-free rate is currently 6% and the market risk premium is estimated to be 8.0%.What is the current value (in millions) of Stuart's equity?

• A)$237.34
• B)$352.42
• C)$427.42
• D)$556.79
• E)$689.10

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Definitions:

Servicing Major Customers

The process or strategy of providing support and maintaining relationships with key or large volume clients to ensure customer satisfaction and loyalty.

Professionals

Individuals who possess specialized knowledge, skills, and often certifications in a particular field or industry, and engage in related activities as a major occupation.

Cross-functional Teams

Groups composed of members from different departments or areas of expertise, working together towards a common goal.

Improve Relationships

The process of enhancing the interactions and communications between individuals, groups, or organizations to foster positive outcomes.