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8a what is WACC? 8. Hectoritis Corp. currently has an FCF of $13 million. A reputable analyst estimates that this FCF is anticipated to increase
8a what is WACC? 8. Hectoritis Corp. currently has an FCF of $13 million. A reputable analyst estimates that this FCF is anticipated to increase by 12% per year for the next 5 years. The analyst esti- mates that at the end of 5 years the company's terminal value will be based on the year-5 FCF and a long-term FCF growth rate of 4%. Suppose the Hectoritis ?-1.5, the r,-3%, the market risk premium E(n)-ri-14%, and Hectorits has 8 million shares outstanding. How should the analyst value the shares of the company? Assume all cash flows occur at year end. QUESTION 6 8b what is FCF in year 5? QUESTION 7 8c what is terminal value in year 5? QUESTION 8 8d what is the share price
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