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AfterPay Co. is expected to generate free cash flow of $75 million next year. (Assume that free cash flow is paid at the end of
AfterPay Co. is expected to generate free cash flow of $75 million next year. (Assume that free cash flow is paid at the end of each year and we are at the beginning of a year.) After that, free cash flow is forecast to grow at 1.50% per annum in perpetuity. The WACC for AfterPay Co. is 9.5%. The firm has 15.5 million shares outstanding and the market value of its debt is $85 million. Assume there are no redundant assets.
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