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A company is forecasted to generate free cash flows of $21 million next year and $24 million the year after. After that, cash flows are
A company is forecasted to generate free cash flows of $21 million next year and $24 million the year after. After that, cash flows are projected to grow at a stable rate in perpetuity. The company's cost of capital is 8.1%. The company has $48 million in debt, $17 million of cash, and 28 million shares outstanding. Using an exit multiple for the company's free cash flows (EV/FCFF) of 14, what's your estimate of the company's stock price?
a. 30.8
b. 26.8
c. 14.9
d. 10.6
e. 18.0
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