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Amarindo , Inc. ( AMR ) , is a newly public firm with 9 . 5 million shares outstanding. You are doing a valuation analysis
Amarindo Inc.AMR is a newly public firm with million shares outstanding. You are doing a valuation analysis of AMR. You estimate its free cash flow in the coming year to be $million and you expect the firm's free cash flows to grow by per year in subsequent years. Because the firm has only been listed on the stock exchange for a short time, you do not have an accurate assessment of AMR's equity beta. However, you do have beta data for UAL, another firm in the same industry: LOADING.... AMR has a much lower debtequity ratio of which is expected to remain stable, and its debt is risk free. AMR's corporate tax rate is the riskfree rate is and the expected return on the market portfolio is
a Estimate AMR's equity cost of capital.
b Estimate AMR's share price.
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