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D Tires free cash flow was just FCF 0 = $1.32. Analysts expect the company's free cash flow to grow by 30% this year, by
D Tires free cash flow was just FCF0 = $1.32. Analysts expect the company's free cash flow to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The WACC for this company 9.00%. D has $4 million in short-term investments and $14 million in debt and 1 million shares outstanding. What is the stock price at year 2? What is the best estimate of the stock's current intrinsic price? If the market price is 33 do you buy or sell?
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