Examlex

Solved

Given the Forecast Below,estimate the Fair Market Value Per Share

question 16

Essay

Given the forecast below,estimate the fair market value per share of Kenmore Air's equity at the end of 2012 if the company has 50 million shares outstanding and the market value of its interest-bearing liabilities on the valuation date equals $300 million.Assume that after 2016,earnings before interest and tax will remain constant at $220 million,depreciation will equal capital expenditures in each year,and working capital will not change.Kenmore Air's weighted-average cost of capital is 11 percent and its tax rate is 40 percent.


Definitions:

Categories

Distinct groups or classes into which data can be classified.

Expected Frequency

The number of times an event is predicted to occur within a specified number of trials or over a given period of time, based on probability.

Observed Frequency

The count of occurrences or instances of a particular event or characteristic in a data set.

Chi-squared Distribution

A distribution used in statistics to test hypotheses about the frequency distribution of observed data compared to the expected distribution if the null hypothesis is true.

Related Questions