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ABC Corporation is a fast growing supplier of office products. The company is expected to generate $20 million of FCF in year 1, $30 million
ABC Corporation is a fast growing supplier of office products. The company is expected to generate $20 million of FCF in year 1, $30 million in year 2, and $40 million in year 3. FCF is expected to grow at a constant rate of 7% after year 3. The required rate of return on the stock is 13%.a.What is ABCs horizon or terminal value?b.What is the firm value today?c.Suppose ABC Corporation has 100 million shares of stock outstanding.What is your estimate of the current price per share?
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