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After Careful Research,you Find the Present Value of the Free

question 40

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After careful research,you find the present value of the free cash flows of a firm to be $100 million.The market value of the firm's preferred stock is $15 million,while the market value of the firm's debt is $40 million.If the firm has 2 million shares of stock outstanding,what is the equity value per share?


Definitions:

Dividend Yield

A metric showing the yearly dividend payouts of a company as a proportion of its stock price.

Gross Margin Ratio

A financial metric indicating the percentage of revenue that exceeds the cost of goods sold; used to assess a company's financial health.

Return on Common Stockholders' Equity

A financial ratio that measures the profitability generated from the common stockholders' equity investment, indicating how efficiently equity capital is being utilized.

Total Asset Turnover

Total asset turnover measures how efficiently a company uses its assets to generate sales, calculated as sales divided by average total assets.

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