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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 8%. 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 9% and Gonzales Corporation has cash of $100 million, debt of $275 million, and 100 million shares outstanding, what is Gonzales Corporation's expected current share price? A. $16.42 B. $22.47 O c. $17.28 OD. $19.88
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