Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Find the share value for a company with the following information: Free cash flow in 2021 is expected to be $90,000 Free cash flow in
Find the share value for a company with the following information:
- Free cash flow in 2021 is expected to be $90,000
- Free cash flow in 2022 is expected to be $95,000
- Free cash flow in 2023 is expected to be $100,000
- Estimated growth rate of cash flows beyond 2023 = 2.75%
- The company's WACC is 9.5%, and they have $0.5mm of debt
- The company has 50,000 shares outstanding
- They pay quarterly dividends of $.35
- Other companies are selling at P/E ratios of 12 times
- What is the share value using the free cash flow valuation method?
- What is the share value using another valuation method?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started