Question
Houda Motors has just announced results that show that the FCF for the past year is $23 mil- lion. An experienced analyst believes that the
Houda Motors has just announced results that show that the FCF for the past year is $23 mil- lion. An experienced analyst believes that the growth rate of the FCF for the next 10 years will be 25% per year and that after 10 years the growth rate will be 7% annually. Houdas WACC is 18%, and the company has 100 million shares outstanding. Value the shares assuming that the FCFs occur at year end. Houda has no debt and no excess cash reserves.
What is the share price?
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Financial Institutions Management A Risk Management Approach
Authors: Anthony Saunders, Marcia Millon Cornett
9th edition
1259717771, 1259717772, 9781260048186, 1260048187, 978-1259717772
