Question
An analyst forecasts that Exet Corp. will generate $28 million of free cash flow over the next year. She expects these free cash flows to
An analyst forecasts that Exet Corp. will generate $28 million of free cash flow over the next year. She expects these free cash flows to grow at a constant rate of 6.5% per year indefinitely. Exet Corp. has $14 million of non-operating assets, $2.5 million of accounts payable, $6.8 million of notes payable, $158 million of long-term debt, and 50 million shares of common stock outstanding that were issued 10 years ago at $5.25 per share. Assume Exet Corp. has a weighted average cost of capital, WACC, of 10.0%. Estimate the per share value of Exet common stock.
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