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HELPPP Luthor Corp. is expected to generate a free cash flow (FCF) of $225.00 million this year (FCF, =$225.00 miltion), and the FCF is expected
HELPPP
Luthor Corp. is expected to generate a free cash flow (FCF) of $225.00 million this year (FCF, =$225.00 miltion), and the FCF is expected to grow at a rate of 22.60% over the following two years (FCF, and FCF, ). After the third year, however, the FCF is expected to grow at a constant rate of 3.18% per year, which will last forever (FCF,). Assume the firm has no nonoperating assets. If Luthor Corp.'s weighted average cost of capital (WACC) is 9.54%, what is the current total firm value of Luthor Corp.? (Note: Round all intermediate calculations to two decimal places.) $4,866.81million$5,840.17million$692.59million$6,179.07million Luthor Corp.'s debt has a market value of $3,650 million, and Luthor Corp, has no preferred stock. If Luthor Corp. has 450 million shares of common stock outstanding, what is Luthor Corp's estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.) $8.11 $1.70 $2.70 $2.97 Step by Step Solution
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