9-5 CORPORATE VALUATION Scampini Technolopies is oxpected to generate $25 mithin in free cash flow next year, and PCF is expected to grow at a constant rate of 4% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 10%. Ir Scanpini has 40 million share of stock outstanding what is the stock's value per share? 9.15 CORPORATE vaLuATION Dantzler Corporation is a fant-growing nopplier af effice prodwets. Analysits project the following free cash flows (FCFs) during, the neet 3 yours, affer which FCP is expected to grow af e constint 5% rate. Danteler's WACC is 11% Year FCF is million a. What is Dantzler's horizon, or continuing, value? (Hint Find the value of all free cath flows beyond Year 3 discounted back to Year 3.) b. What is the firm's market value today? A cume that Dantzler has zero non-operating assets. C. Suppoes Dantaler has $112.60 million of debt and 25 million share of stock outstanding What is your estimate of the current price per share? 9-19 CORPORATE VALUATION Brandtly Industries invests a large sum of money in RKD; as a result, it retains and reinvests all of its earnings. In other words, Brandtly does not pay any dividends, and it has no plans to pay dividends in the near future. A major pension fund is interested in purchasing Brandtly's stock. The pension fund manager has estimated Brand tly's free cash flows for the next 4 years as follows: $3 million, $6 million, $6 million. and 516 million. After the fourth year, free cash flow is projected to grow at a constant 3%. Brandtly's WACC is 9%, the market value of its debt and preferred stock totals 575 million, the firm has $15 million in non-operating assets, and it has 7.5 million shares of common stock outstanding. a. What is the present value of the free cash flows projected during the next 4 years? b. What is the firm's horizon, or continuing, value? c. What is the market value of the company's operations? What is the firm's total market value today? d. What is an estimate of Brandtly's price per share