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25 Analysts expect Overhill Railroads to generate free cash flow of $25 million next year. (Assume that free cash flow is paid at the end
25 Analysts expect Overhill Railroads to generate free cash flow of $25 million next year. (Assume that free cash flow is paid at the end of each year and we are at the beginning of a year.) After that, free cash flow is expected to go grow at 3.25% per annum in perpetuity. The WACC for Overhill Railroads is 9.90%. The firm has 10.5 million shares outstanding and the market value of its debt is $95 million. Calculate the fair price for Overhill Railroads' shares today. A) *$26.76 B) $29.25 C) $32.76 $35.80 $39.13 D)
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