Based on the Information Provided, Calculate the Intrinsic Value in 2010

question 182

Multiple Choice

Based on the information provided, calculate the intrinsic value in 2010 of a share of INV Corp. using the FCFF (free cash flow to the firm) model. For 2010 the FCFF was $30,000, total debt was $20,000, and there were 12000 shares outstanding. The required rate of return is 9 percent, and the estimated growth rate in FCFF is 6.5 percent.

• A) $104.83
• B) $153.25
• C) $112.50
• D) $94.92
• E) $80.45

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Definitions:

Z-Score

A statistical metric that describes a value's relationship to the mean of a group of values, measured in terms of standard deviations.

Z-Score

A statistical measure that describes a score's relationship to the mean in a group of scores, typically used to understand how far a point is from the average in terms of standard deviations.

Z-Score

A numerical indicator that represents how a specific value compares to the average of a dataset, illustrated by the number of standard deviations it is from that average.

Z-Score

Represents how many standard deviations an element is from the mean, providing a way to compare data points across different scales.