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5) Machka Food Corporation is expected to generate the following free cash flows over the next four years: Year 2 3 FCF($Million) 29 39 95
5) Machka Food Corporation is expected to generate the following free cash flows over the next four years: Year 2 3 FCF($Million) 29 39 95 49 After then, the free cash flows are expected to grow at the industry average of 19% per year. a) If Machka Food's weighted average cost of capital is 20%, compute the firm value by using discounted free cash flow model. (15 pts) b) If Machka Food has debt of $89 million, and million shares outstanding, estimate its share price. (5 pts)
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