Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
Company A is thinking of acquiring Company B, a similar firm that boasts an industry leading sales force. Estimated free cash flows for Company B
Company A is thinking of acquiring Company B, a similar firm that boasts an industry leading sales force. Estimated free cash flows for Company B are expected to be $1.10 million annually for the next 5 years, and $875000 annually every year thereafter. The appropriate discount rate is 8%. If Company B currently has $4300000 debt outstanding and 1,000,000 shares outstanding, what should their price per share be? Round your answer to 2 decimal places
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started