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Calculate what you think the share price for company X should be given the following information and modelling firm value as a perpetuity with growth:
Calculate what you think the share price for company X should be given the following information and modelling firm value as a perpetuity with growth:
Cash Flow From Operations= 15,500m
Capital Expenditure= 4,600m
Interest Expense= 950m
Corporate Tax= 30%
Growth rate = 2% every year
Cash on Balance Sheet = 6,200m
Number of Shares = 5,000m
Total Debt = 8,000m
Total Equity= 90,000m
Cost of Equity re= 9.5%
Cost of Debt rd = 4%
If the share currently costs $12 in the market, what action would you take?
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