Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ABC Telecom Inc. is expected to generate a free cash flow ( FCF ) of $ 5 , 2 3 0 . 0 0 million

ABC Telecom Inc. is expected to generate a free cash flow (FCF) of $5,230.00 million this year (FCF= $5,230.00 million), and the FCF is expected to grow at a rate of 21.40% over the following two years (FCF and FCF). After the third year, however, the FCF is expected to grow at a constant rate of 2.82% per year, which will last forever (FCF). Assume the firm has no nonoperating assets. If ABC Telecom Inc.s weighted average cost of capital (WACC) is 8.46%, what is the current total firm value of ABC Telecom Inc.? (Note: Round all intermediate calculations to two decimal places.)
$16,260.71 million
$151,675.76 million
$156,780.39 million
$126,396.47 million
ABC Telecom Inc.s debt has a market value of $94,797 million, and ABC Telecom Inc. has no preferred stock. If ABC Telecom Inc. has 600 million shares of common stock outstanding, what is ABC Telecom Inc.s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.)
$158.00
$57.93
$52.67
$51.67

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Equity Valuation And Portfolio Management

Authors: Frank J. Fabozzi, Harry M. Markowitz

1st Edition

047092991X, 9780470929919

More Books

Students also viewed these Finance questions

Question

10. What are the key elements of Lean value streams within SAFe?

Answered: 1 week ago

Question

Write a Python program to check an input number is prime or not.

Answered: 1 week ago