Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

11. More on the corporate valuation model Lex Corp. is expected to generate a free cash flow (FCF) of $6,345.00 million this year (FCF1-$6,345.00 million),

image text in transcribed

11. More on the corporate valuation model Lex Corp. is expected to generate a free cash flow (FCF) of $6,345.00 million this year (FCF1-$6,345.00 million), and the FCF is expected to grow at a rate of 21.40% over the following two years (FC 2 and FC 3). After the third year, however, the FCFis expected to grow at a constant rate of 2.82% per year, which will last forever FC 4 If Lex Corp.'s weighted average cost of capital WACC s 8.46%, what is the current total firm value of Lex Corp.? O $184,012.13 million $190,205.04 milliorn $19,727.38 million $153,343.44 milliorn Lex Corp.'s debt has a market value of $115,008 million, and Lex Corp. has no preferred stock. If Lex Corp. has 450 million shares of common stock outstanding, what is Lex Corp.'s estimated intrinsic value per share of common stock? $85.19 $84.19 O $255.57 $93.71

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

How To Day Trade Futures

Authors: Joseph Dinero

1st Edition

154249902X, 978-1542499026

More Books

Students also viewed these Finance questions