Question
A company is expected to have free cash flows of $0.75 million next year. The weighted average cost of capital is WACC = 10.5%, and
A company is expected to have free cash flows of $0.75 million next year. The weighted average cost of capital is WACC = 10.5%, and the expected constant growth rate is g = 5.4%. The company has $1 million in short-term investments, $2 million in debt, and 1 million shares. What is the stock's current intrinsic stock price?
| a. | $18.29 | |
| b. | $16.29 | |
| c. | $17.39 | |
| d. | $14.50 | |
| e. | $13.71 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Finance For Non Financial Managers
Authors: Pierre G. Bergeron
5th Edition
0176104070, 9780176104078
