Question
Assume the forecasted free cash flows over the next five years from year 1 to year 5 for the a firm are (cash flows are
Assume the forecasted free cash flows over the next five years from year 1 to year 5 for the a firm are (cash flows are in millions of $): year 1 = 186, year 2= 202, year 3 = 220, year 4 = 239, year 5 = 260.Assume that these cash flows all occur at the end of the year.Also assume that the terminal firm value of the firm at the end of year five is estimated to be 15 times its year five free cash flow of $260 million.Also assume that the firm has net debt obligations of $318.5 million and that there are 37.5 million shares of stock. Based on the above assumptions and the discount rate for the firms total opeartions is WACC of 16%, what is the price per share for the firms stock?
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