Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Find the share value for a company with the following information: Free cash flow in 2021 is expected to be $90,00 Free cash flow in

image text in transcribed
Find the share value for a company with the following information: Free cash flow in 2021 is expected to be $90,00 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 plan to pay quarterly dividends of $.25, $.30, and $.25 over each of the ne years, with the dividend increasing by 3% annually thereafter. a) What is the share value using the free cash flow valuation method? b) What is the share value using the dividend growth model

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_2

Step: 3

blur-text-image_3

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

Principles Of Managerial Finance Brief

Authors: Chad J. Zutter, Scott B. Smart

8th Global Edition

1292267143, 978-1292267142

More Books

Students also viewed these Finance questions

Question

Please help me evaluate this integral. 8 2 2 v - v

Answered: 1 week ago

Question

LO2 Describe the various purposes of performance appraisals.

Answered: 1 week ago