Question
Conundrum Mining is expected to generate $12 million, $18 million, $22 million and $26 million in free cash flows over the next four years, after
Conundrum Mining is expected to generate $12 million, $18 million, $22 million and $26 million in free cash flows over the next four years, after which they are expected to grow at a rate of 5% per year. If the weighted average cost of capital is 12% and Conundrum has cash of $80 million, debt of $60 million, and 30 million shares outstanding, what is Conundrum's expected current share price?
I know the answer is 10.84. But I want to know how you compute FCF for year 5.
like what do you plug in? what numbers do you use?
The FCF for year 5 is 27.3M. how do you get to 27.3M
please I need a detailed explanation?
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