A firm's end-of-year free cash flow is anticipated to be $14 million. The company's free cash...
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A firm's end-of-year free cash flow is anticipated to be $14 million. The company's free cash flows are expected to grow 15 percent a year forever. The firm's weighted average cost of capital is 18 percent, and the firm has 20 million common stock outstanding shares. The firm has no long-term debt in its capital structure. If the firm has $15 million in preferred stock, the firm's estimated intrinsic value of its common stock per share is $ Calculate to two decimal points using the following formula: PV = ((FCF/(WACC - g)) - total debt) / common shares. A firm's end-of-year free cash flow is anticipated to be $14 million. The company's free cash flows are expected to grow 15 percent a year forever. The firm's weighted average cost of capital is 18 percent, and the firm has 20 million common stock outstanding shares. The firm has no long-term debt in its capital structure. If the firm has $15 million in preferred stock, the firm's estimated intrinsic value of its common stock per share is $ Calculate to two decimal points using the following formula: PV = ((FCF/(WACC - g)) - total debt) / common shares.
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First we need to calculate the free cash flow for the next year FCF1 FCF0 1g 14 million ... View the full answer
Related Book For
ISE Analysis For Financial Management
ISBN: 9781265042639
13th International Edition
Authors: Robert C. Higgins Professor, Jennifer Koski
Posted Date:
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