Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Extensive Enterprise Inc. is expected to generate a free cash flow ( FCF ) of $ 7 , 6 9 5 . 0 0 million

Extensive Enterprise Inc. is expected to generate a free cash flow (FCF) of $7,695.00 million this year (FCF 1=$7,695.00 million), and the FCF is expected to grow at a rate of 19.00% over the following two years (FCF 2 and FCF3). After the third year, however, the FCF is expected to grow at a constant rate of 2.10% per year, which will last forever (FCF4). Assume the firm has no nonoperating assets. If Extensive Enterprise Inc.'s weighted average cost of capital (WACC) is 6.30%, what is the current total firm value of Extensive Enterprise Inc.? (Note: Round all intermediate calculations to two decimal places.)
$293,940.62 million
$24,414.75 million
$244,950.52 million
$289,312.85 million
Extensive Enterprise Inc.'s debt has a market value of $183,713 million, and Extensive Enterprise Inc. has no preferred stock. If Extensive Enterprise Inc. has 600 million shares of common stock outstanding, what is Extensive Enterprise Inc.'s estimated intrinsic value per share of common stock?
(Note: Round all intermediate calculations to two decimal places.)
$101.06
$112.27
$102.06
$306.19
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Performance

Authors: Marc Bertoneche, Rory Knight

1st Edition

0750640111, 978-0750640114

More Books

Students also viewed these Finance questions