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I need step by step explanation on how to solve this using a financial calculator: Analysts project the following free cash flows (FCFs) for Ezzell
I need step by step explanation on how to solve this using a financial calculator:
Analysts project the following free cash flows (FCFs) for Ezzell Corporation during the next 3 years, after which FCF is expected to grow at a constant 7% rate. Ezzells WACC is 12%. Ezzell has $100 in debt and 40 shares of stock.
Time | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 |
FCF | -$50 | $60 | $35 | ?? |
What should be the current price of Ezzells stock?
a. $9.22
b. $13.22
c. $11.53
d. $11.22
e. $12.98
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