Question
If there are 500 million shares outstanding , use the following information to find a fair equity value for Galaxy Interiors stock using the Free
If there are 500 million shares outstanding, use the following information to find a fair equity value for Galaxy Interiors stock using the Free Cash Flow (FCF) model.
- Free cash flow = 8000 million
- Free cash flow (FCF) will grow at 2.5%
- Galaxy's equity beta is 1.50
- Risk-free rate is 3% and market return is 13%
- Currently, Galaxy is not paying any dividends
- Total debt value = 10,000 million
- further note that:
- tax rate = 25%
- D/E ratio = 70%
*note: use at least 6 decimals for your interim calculations
What is the stock value per share for Galaxy Interiors?
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
The Preppers Financial Guide
Authors: Jim Cobb
1st Edition
1612434037, 978-1612434032
