Highpoint Had a FCFE of $246M Last Year and Has

question 101

Multiple Choice

Highpoint had a FCFE of $246M last year and has 123M shares outstanding. Highpoint's required return on equity is 10%, and WACC is 9%. If FCFE is expected to grow at 8.0% forever, the intrinsic value of Highpoint's shares is

• A) $21.60.
• B) $108.
• C) $244.42.
• D) $216.00.

Recognize the use of quantity words in forming categorical arguments.

Identify formalization options for given arguments.

Understand the biological and physiological developmental characteristics of newborns.

Identify and describe the protective mechanisms present at birth.

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Definitions:

Undisclosed Principal

A legal term referring to a situation where an agent acts on behalf of a principal, but the identity of the principal is not revealed to the third party involved in the transaction.

Formalities

Specific procedures, requirements or conditions that are mandated by law or established practice.

Partnership

A form of business organization; specifically, an association of two or more persons to carry on a business as co-owners for profit.

Leases

Contracts in which one party, the lessor, grants another party, the lessee, the right to use an asset for a specified period in return for regular payments.