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Camper,Inc. is interested in acquiring Baxter Corp. Baxter has 40 million shares outstanding. Its WACC is 9.5% and the risk free rate is 5%. Baxter
Camper,Inc. is interested in acquiring Baxter Corp. Baxter has 40 million shares outstanding. Its WACC is 9.5% and the risk free rate is 5%. Baxter has $10 million in debt. Baxter's free cash flow is $25 million annually and is expected to grow at a constant rate of 4% per year. Calculate the intrinsic value of Baxter's stock, using the formula Vop = FCF0(1+g)/WACC - g. Based on your calculations, what is the value of Baxter's stock per share? |
$11.11 |
$11.57 |
$11.82 |
$14.00 |
None of the above |
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