Question
a. Scampini Technologies is expected to generate $125 million in free cash flow next year, and FCF is expected to grow at a constant rate
a. Scampini Technologies is expected to generate $125 million in free cash flow next year, and FCF is expected to grow at a constant rate of 8% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 11%. If Scampini has 55 million shares of stock outstanding, what is the stock's value per share? Round your answer to two decimal places.a. A stock is expected to pay a dividend of $1.50 at the end of the year (i.e., D1 = $1.50), and it should continue to grow at a constant rate of 5% a year. If its required return is 13%, what is the stock's expected price 5 years from today? Round your answer to two decimal places. Do not round your intermediate calculations.
b. You are considering an investment in Justus Corporation's stock, which is expected to pay a dividend of $1.75 a share at the end of the year (D1 = $1.75) and has a beta of 0.9. The risk-free rate is 4.3%, and the market risk premium is 5.0%. Justus currently sells for $26.00 a share, and its dividend is expected to grow at some constant rate, g. Assuming the market is in equilibrium, what does the market believe will be the stock price at the end of 3 years? (That is, what is ?) Round your answer to two decimal places. Do not round your intermediate calculations.
c.A stock is expected to pay a dividend of $1.50 at the end of the year (i.e., D1 = $1.50), and it should continue to grow at a constant rate of 5% a year. If its required return is 13%, what is the stock's expected price 5 years from today? Round your answer to two decimal places. Do not round your intermediate calculations.
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