Question
Firm C's free cash flows are expected to be $120 million in one year, $140 million in two years, and $150 million in three years.
Firm C's free cash flows are expected to be $120 million in one year, $140 million in two years, and $150 million in three years. Afterwards, they are expected to grow at 2% per year forever. Firm C has 350 million in debt and $27 million excess cash. It has 100 million shares outstanding. Firm C's weighted average cost of capital is 11%.
What is Firm C's fair price per share?
Step by Step Solution
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Step: 1
To calculate Firm Cs fair price per share we can use the discounted cash flow DCF method The fair pr...
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Corporate Finance A Focused Approach
Authors: Michael C. Ehrhardt, Eugene F. Brigham
6th edition
1305637100, 978-1305637108
