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 6% rate. Dozier's weighted average cost of capital is WACC = 17%.
| Year | |||
| 1 | 2 | 3 | |
| Free cash flow ($ millions) | -$20 | $30 | $40 |
What is Dozier's horizon value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Round your answer to two decimal places. $ million
What is the current value of operations for Dozier? Do not round intermediate calculations. Round your answer to two decimal places.
$ million
Suppose Dozier has $10 million in marketable securities, $100 million in debt, and 10 million shares of stock. What is the intrinsic price per share? Do not round intermediate calculations. Round your answer to the nearest cent. $
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Behavioral Finance Psychology Decision-Making and Markets
Authors: Lucy Ackert
1st edition
324661177, 978-0538752862, 538752866, 978-1111781675, 1111781672, 978-1133455486, 978-0324661170
