Question
5.2. You are interested in Expong stock. You try to calculate intrinsic value of Expong stock using corporate valuation model. Free cash flows(FCF) are expected
5.2. You are interested in Expong stock. You try to calculate intrinsic value of Expong stock using corporate valuation model. Free cash flows(FCF) are expected to be -11, 12.1, 40 million dollars for year1, 2, and 3 and are assumed to grow at a constant rate of 5% after year 3. The other related information is as follows. Cost of equity 8% Long-term debt $61.157 million What is horizon or continuing value of Expong stock? What is the intrinsic value per share of Expong stock? If current stock price of Expong is $55, make decision whether or not you buy the stock. The following information (1) (2) (3) WACC Shares outstanding 10% 10 million
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