Question
Acme Corp. is expected to generate a free cash flow (FCF) of $3,555.00 million this year (FCFI $3,555.00 million), and the FCF is expected to
Acme Corp. is expected to generate a free cash flow (FCF) of $3,555.00 million this year (FCFI $3,555.00 million), and the FCF is expected to grow at a rate of 21.40% over the following two years (FCF2 and FCF3). After the third year, however, the FCF is expected to grow at a constant rate of 2.82% per year, which will last forever (FCF4). If Acme Corp.'s weighted average cost of capital (WACC) is 8.46%, what is the current total firm value of Acme Corp.?
O $85,915.93 million O $103,099.12 million O $106,568.90 million O $11,052.94 million
Acme Corp.'s debt has a market value of $64,437 million, and Acme Corp. has no preferred stock. If Acme Corp. has 225 million shares of common stock outstanding, what is Acme Corp.'s estimated intrinsic value per share of common stock?
O $94.46 O $286.39 O $95.46 O $105.01
Please answer both sections of the answer. Thank you.
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