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Hamtramck, Inc. FCF 1 = 2,700 FCF 2 = 2,900 FCF 3 = 3,100 From FCF 3 onwards, FCF grows at a 6.0% constant rate.
Hamtramck, Inc.
- FCF1= 2,700 FCF2 = 2,900 FCF3 = 3,100
- From FCF3 onwards, FCF grows at a 6.0% constant rate.
- WACC = 14.0%
- T. Debt Outstanding: $4,416.75
- # of Common Stock outstanding: 1,500
Question: What is the fair price of a Jefferson stock?
FCF4 = FCF3 x (1 + gL)
HV3 = FCF4 (WACC gL)
V0p = PV(FCF1) + PV(FCF2) + PV(FCF3) + PV(HV3)
VEquity = VOP - Debt
P0 = VEquity N
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Advances In Entrepreneurial Finance
Authors: Rassoul Yazdipour
2011th Edition
148998190X, 978-1489981905
