Market Value of Equity Today Assignment

Lizo is a public company with the following characteristics (in the most recent year): – At the start of the year, the firm had book value of equity of $400 million, debt outstanding (book value as well as market value) of $200 million, and cash balance of $100 million. These numbers did not change during the most recent year. – The cost of capital for the firm is 6% next year, 8% the year after and 9% thereafter (in perpetuity). – Shares outstanding: 200 million – After-tax operating income: $100 million – Revenues: $800 million

a) Lizo’s after-tax operating income is expected to grow 20% in each of the next 3 years. You expect Lizo to maintain its current return on invested capital (ROIC) forever. Estimate the free cash flows to the firm in each of the next 3 years.

b) At the end of year 3, you expect Lizo to be in stable growth, growing 5% a year in perpetuity, while maintaining its current return on invested capital. Estimate the terminal value at the end of year 3.

c) Estimate the market value of equity today.

d) Lizo has 50 million options outstanding. Assume that the market value of each option is $5. Using the “market value approach”, estimate the value per share for Lizo today. Get Finance homework help today

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Australia Assessments
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Business and administrative studies
Excellent.
Customer 459947, April 6th, 2022
Environmental studies and Forestry
Good work.
Customer 458115, June 6th, 2022
SEO
good
Customer 463813, May 11th, 2023
Accounting
Thank you so much for the help, with your help that provided me with more time to learn the materials and do other assignments. I wish you existed back in 2005.
Customer 453041, June 3rd, 2020
Psychology
Looks great.
Customer 463363, September 23rd, 2022
Business and administrative studies
Excellent.
Customer 453509, May 23rd, 2022
Business and administrative studies
I had to make some updates but overall the paper was great. Will need to use this writer again for the next part.
Customer 453721, October 29th, 2022
history
Excellent responses.
Customer 463049, June 5th, 2022
Political science
Great job God bless you
Customer 453983, February 4th, 2020
Religious studies
Thank you this was supper
Customer 452763, March 17th, 2020
Business
Impeccable!
Customer 452441, April 3rd, 2022
Accounting
Thank you for the revision! This is how it should look like.
Customer 463407, October 16th, 2022
11,595
Customer reviews in total
96%
Current satisfaction rate
3 pages
Average paper length
37%
Customers referred by a friend
OUR GIFT TO YOU
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat