Question
Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF
Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 4% rate. Dozier's WACC is 15%. Year 0 1 2 3 ....... ....... ....... ....... ....... ....... ....... ....... FCF ($ millions) ....... ....... ....... ....... ....... ....... ....... ...... NA - 11 16 53 a. What is Dozier's terminal, or horizon, value? Round your answer to two decimal places. (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) b. What is the firm's value today? Round your answer to two decimal places. c. Suppose Dozier has $154 million of debt and 8 million shares of stock outstanding. What is your estimate of the price per share? Round your answer to two decimal places.
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