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A firm has 2 5 0 , 0 0 0 shares of common stock outstanding at a current price of $ 3 1 . 3

A firm has 250,000 shares of common stock outstanding at a current price of $31.30 per share, debt of $7,000,000. Free cash flow for the current year (T =0) is $900,000, which is expected to then grow at a constant rate of 3.0 percent. Given this information, determine by how much this stock is "theoretically" under-valued or over-valued if the WACC is 9.0 percent . $ 2.50 $3.95 $ 2.70 $ 3.20 $ 2.95

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