Answered step by step
Verified Expert Solution
Question
1 Approved Answer
ABC Enterprise has never paid a dividend. Free cash flow is projected to be $20 million and $35 million for the next 2 years, respectively;
ABC Enterprise has never paid a dividend. Free cash flow is projected to be $20 million and $35 million for the next 2 years, respectively; after the second year, FCF is expected to grow at a constant rate of 6%. The companys weighted average cost of capital is 12%. ABC has short-term investments of $100 million, the total debt of $100 million, and preferred stock of $20 million. ABC has 15 million shares of common stock. What is the intrinsic price per share? (Do not use the dollar sign ($) and round your answer to 2 decimal points)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started