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:

Hypotonic Solution

A solution that has a lower solute concentration compared to another solution, leading to the potential of water entering into a cell by osmosis.

Chromatin Condenses

The process by which chromatin fibers thicken and shorten to form distinct chromosomes during cell division.

Nucleoli Disappear

A phenomenon occurring during the cell division process (specifically in prophase of mitosis) where the nucleolus breaks down and disappears.

Prophase

is the first stage of cell division in both mitosis and meiosis, characterized by the condensation of chromosomes and the breakdown of the nuclear envelope.