Brutus Buckeye Co. generated free cash flow of $80 million t…

Brutus Buckeye Co. generated free cash flow of $80 million this past year. For the next two years, the company’s free cash flow is expected to grow at a rate of 12%. After that time, the company’s free cash flow is expected to level off to the industry long-term growth rate of 4% per year. If the weighted average cost of capital is 12% and the company has cash of $100 million, debt of $300 million, and 100 million shares outstanding, what is the company’s total market capitalization? (reminder: market capitalization = price per share * number of shares outstanding)

Brutus Co. plans to launch a new type of indelible ink pen….

Brutus Co. plans to launch a new type of indelible ink pen. Advertising for the new product will be heavy and will cost the company $9 million, although the company expects general revenues of $280 million next year from sources other than sales of the new pen. If Brutus Co. has a corporate tax-rate of 35% on its pretax income, what effect will the advertising for the new pen have on its taxes?

On a particular date, the information concerning Office Depo…

On a particular date, the information concerning Office Depot, Incorporated, was given on Google Finance: Market Cap = $1.89Bn, Shares = 275Mil, EPS = $0.74, P/E = 9.26. Its competitor, Staples Incorporated, had a stock price of $24.33. Which of the following is closest to the EPS of Staples Incorporated if it is estimated using valuation multiples based on price-earnings ratios?