Question
According to the value based management model, what is the stock price per share given the following data? Year 1 Revenue 725.00 Fixed costs 90.00
According to the value based management model, what is the stock price per share given the following data?
Year | 1 | |
Revenue | 725.00 | |
Fixed costs | 90.00 | |
Variable costs | 280.00 | |
Additional investment in NWC | 3.00 | |
Additional investment in operating long-term assets | 80.00 | |
Depreciation | 75.00 | |
Tax rate | 0.40 |
The free cash flow is expected to grow at 8% from year 1 to year 5 and 6% after year 5 to infinity.
WACCcomp = 20%.
Market value of the firm: | |||
Price per share | Number of shares | Market value | |
Long-term debt | 700.00 | ||
Preferred stock | 7.00 | 10 | 70.00 |
Common stock, equity | 15.00 | 100 | 1,500.00 |
Total | 2,270.00 |
Market value of non-operating short-term assets=50
Market value of non-operating long-term assets=80
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