Question
Hi, please help! I have no idea how to answer this problem. Year 1 2 3 4 5 Free Cash Flow $21 million $26 million
Hi, please help! I have no idea how to answer this problem.
Year 1 2 3 4 5
Free Cash Flow $21 million $26 million $30 million $31 million $33 million
XYZ Industries is expected to generate the above free cash flows over the next five years, after which free cash flows are expected to grow at a rate of 4% per year. If the weighted average cost of capital is 7% and XYZ has cash of $15 million, debt of $48 million, and 71 million shares outstanding, what is General Industries' expected current share price?
Answer in millions and round to the nearest cent.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started