Question
1.) Omni Consumer Products Co. is expected to generate a free cash flow (FCF) of $13,840.00 million this year (FCF = $13,840.00 million), and the
1.) Omni Consumer Products Co. is expected to generate a free cash flow (FCF) of $13,840.00 million this year (FCF = $13,840.00 million), and the FCF is expected to grow at a rate of 20.20% over the following two years (FCF and FCF). After the third year, however, the FCF is expected to grow at a constant rate of 2.46% per year, which will last forever (FCF). Assume the firm has no non-operating assets. If Omni Consumer Products Co.s weighted average cost of capital (WACC) is 7.38%, what is the current total firm value of Omni Consumer Products Co.? (Note: Round all intermediate calculations to two decimal places.)
a) $459,889.05 million
b) $455,754.34 million
c) $43,466.49 million
d) $379,795.28 million
2. Omni Consumer Products Co.s debt has a market value of $284,846 million, and Omni Consumer Products Co. has no preferred stock. If Omni Consumer Products Co. has 225 million shares of common stock outstanding, what is Omni Consumer Products Co.s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.)
a) $1,265.98
b) $422.00
c) $464.20
d) $421.00
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started