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A firm has forecasted free cash flows as follows: year free cash flows as follows $(millions) 1 200 2 250 Beyond year 2, its FCFs
A firm has forecasted free cash flows as follows:
year free cash flows as follows $(millions)
1 200
2 250
Beyond year 2, its FCFs are expected to grow at 2% per year infinitely. The firm has $300 Mil in short term investments; $400 million in preferred stock, and $400 million incorporate bonds. There are 10 million shares of common stock outstanding. If the firm has a weighted average cost of capital of 15%, what is the intrinsic value of the common stock?
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