Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A company is projected to have a free cash flow of $371 million next year, growing at a 5.3% rate until the end of year
A company is projected to have a free cash flow of $371 million next year, growing at a 5.3% rate until the end of year 3. After that, cash flows are expected to grow at a stable rate of 2.4%. The company's cost of capital is 12.2%. The company owes $86 million to lenders and has $15 million in cash. If it has 236 million shares outstanding, what is your estimate for its stock price? Round to one decimal place.
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