upta Ltd. is a fast-growing internet solutions company. Its projected revenues and costs for next year are R120 million and R66 million respectively. For the foreseeable future, it is expected that the revenues will grow by 10% per annum while costs are expected to record zero growth. The required rate of return is 22%. What is Lupta Ltd’s value?
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Lupta Ltd. is a fast-growing internet solutions company.
Its projected revenues and costs for next year are R120 million and R66 million respectively.
For the foreseeable future, it is expected that the revenues will grow by 10% per annum while costs are expected to record zero growth.
The required
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- Finally, assume that the new product line isexpected to decrease sales of the firm’s otherlines by $50,000 per year. Should this be considered in the analysis? If so, how?Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1 and by 5% in Year 2. Its operating profitability ratio (OP) is 10%, and its capital requirement ratio (CR) is 80%? What are the projected sales in Years 1 and 2? What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2? What is the projected FCF for Year 2?A company wants to invest $619,932 today. The expected returns in years 1, 2, and 3 are $244,539, $175,421, and $341,884, respectively. If the rate of return on investment must be at least 15%, and the probability of commercial and technical success are 0.89 and 0.86, respectively. What is the maximum expenditure justified that the company may spend?
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- The consulting company Maggi has been hired to value the company Bolli AS. Bolli expects one operating profit of NOK 400 million in 2023. The company is expected to grow by 2.25% in year, and achieves a 9% return on invested capital. Bolli is 100% equity financed and the cost of equity is 10%. a) Maggi believes that growth in the future will be higher than 2.25%, they believe that it is more likely to be 4.5%. What is the value of Bolli in 2022 if this growth is used as a basis. the value calculation? b) Explain the difference in values from questions b) and c)? c) Maggi then believes that an investment rate of 20% should be used for Bolli, and one growth of 3%, what will be the value of Bolli in 2022 based on this investment rate and the growth?A firm will earn a taxable net return of $500 million next year. If it took on debt today, it would have to pay creditors\varepsilon(rDebt) = 5% + 10% x wDebt2. Thus, if the firm has 100% debt, the financial markets would demand 15% expected rate of return. Further, assume that the financial markets will lend the firm capital at this overall net cost of 15%, regardless of how the firm is financed. The firm is in the 25% marginal tax bracket. 1. If the firmis fully equity-financed, what is its value? 2. Using APV, if the firm is financed with equal amounts of debt and equity today, what is its value? 3. Using WACC, if the firm is financed with equal amounts of debt and equity today, what is its value? 4. Does this firm have an optimal capital structure? If so, what is its APV and WACC?Rentech Ltd company a biotech company, is expected to grow rapidly in the next three years and then have a level growth rate for the foreseeable future. The company expects free cash flows of $342.5 million, $512.3 million, and $750 million over the next three years, and thereafter its cash flows will grow at a steady rate of 8 per cent per annum. The company has no non-operating assets (NOA). If the appropriate WACC is 11.25 per cent, what is the enterprise value of this business? Round to the nearest million. a.$19,367 million b.$18,101 million c.$26,190 million d.$24,923 million
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