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Gonzales Corporation generated free cash flow of $85 million this year. For the next two years, the company's free cash flow is expected to grow
Gonzales Corporation generated free cash flow of $85 million this year. For the next two years, the company's free cash flow is expected to grow at a rate of 7%. After that time, the company's free cash flow is expected to level off to the industry long-term growth rate of 4% per year. If the weighted average cost of capital is 11% and Gonzales Corporation has cash of $90 million, debt of $250 million, and 100 million shares outstanding, what is Gonzales Corporation's expected current share price?
A) $15.27
B) $11.74
C) $13.51
D) $11.16
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