BUS 413 Lecture Notes - Lecture 6: Free Cash Flow, Nopat, Current Liability
20 Jan 2019
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Market value of 10% of shares = 0. 10( 10 million) = million. million is the free cash flow available to investors. The after-tax cost of paying million to creditors in interest is million ( million (1 0. 30) and therefore million is available to repurchase shares. Since million is needed to repurchase 10% of its shares, marine tech will not be able to fully carry out its repurchase plan. 2-13: mva = market value of stock equity capital supplied by shareholders. = ()(120,000,000 shares) (,312,000,000 + ,464,000,000) = ,424,000,000: eva = (operating capital)(roic wacc) = (,150,000,000)(0. 1057 0. 12) Operating capital15 = net plant & equipment + nowc. Operating capital16 = net plant & equipment + nowc. Fcf = nopat net investment in operating capital. ,325,000=0. 2075=20. 75: eva = (operating capital)(roic wacc) = (,325,000)(0. 2075 0. 13)= Mva = market value of stock equity capital supplied by shareholders.
