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An analyst must estimate the intrinsic value of Yugo Automotive Companys stock. Yugos end-of-year free cash flow (FCF) is expected to be $375 million, and
An analyst must estimate the intrinsic value of Yugo Automotive Companys stock. Yugos end-of-year free cash flow (FCF) is expected to be $375 million, and it is expected to grow at a constant rate of 6.5% a year thereafter. The companys WACC is 12%. Yugo has $2,500 million of long-term debt plus preferred stock, and there are 75 million shares of common stock outstanding. What is Yugo's estimated equity value per share of common stock?
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