A minor league professional hockey team embarks on an aggressive facility expansion that requires additional capital. Management

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A minor league professional hockey team embarks on an aggressive facility expansion that requires additional capital. Management decides to finance the expansion by borrowing \($40\) million and by halting dividend payments to increase retained earnings. The projected free cash flows are \($5\) million for the current year, \($10\) million for the following year, and \($20\) million for the third year. After the third year, free cash flow is projected to grow at a constant 6%. The overall cost of capital is 10%. What is the total value of the organization? If it has 10 million shares of stock and \($40\) million in total debt, what is the price per share?

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