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As an analyst, you've forecasted financial statements for a particular firm and have calculated FCFE in each of the next five years. In year 1
As an analyst, you've forecasted financial statements for a particular firm and have calculated FCFE in each of the next five years. In year 1 FCFE will be $552. In year 2, FCFE will be $563. In year 3, FCFE will be $580. In year 4, FCFE will be $591. In year 5 FCFE will be $601. You have made the assumption that the FCFE will grow at a constant rate of 3% per year indefinitely after year 5. Further, there are 100 shares outstanding and the required return is 13%. What is the price of the stock per share? (Note: all FCFE are denoted in millions - so 552 is 552,000,000 - also shares outstanding are in millions - e.g. 100,000,000) O $45.21 O $41.23 O $38.66 $62.03 O $33.52 O $53.80 O $57.89 O $41.46
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