Question
A company had free-cash-flows of $13,159.90 in millions in the past year and has expected growth rate of 1.70% in the next year, 4.90% in
A company had free-cash-flows of $13,159.90 in millions in the past year and has expected growth rate of 1.70% in the next year, 4.90% in the second year, 3.00% in the third year and 1.10% in the fourth year. Finally the firm expects the growth to become 2.00% long-term thereafter. Given that the weighted average cost of capital (WACC) for the firm is 22.83%, what is the expected firm value and share price if there are 1,768,000 shares outstanding? (Hint: use Discounted Free-Cash Flows model)
| a. The market value of the firm is: $79,028.58 and the share price is $0.04. | ||
| b. The market value of the firm is: $64,954.77 and the share price is $0.04. | ||
| c. The market value of the firm is: $63,330.42 and the share price is $0.04. | ||
| d. The market value of the firm is: $65,868.68 and the share price is $0.04. |
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Advanced Accounting
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
12th edition
1305084853, 978-1305464803, 130546480X, 978-1305799448, 978-1305084858
