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It is December 2022. Google has offered to buy your internet startup. The Google negotiators and you both agree on the following expectations. Year Expected
It is December 2022. Google has offered to buy your internet startup. The Google negotiators and you both agree on the following expectations. Year Expected free cash flow to the firm (end of year) 2023 120,000 2024 180,000 2025 270,000 2026 360,000 2027 450,000 After 2027, cash flows are expected to grow by 4% per year. Based on the riskiness of your industry, you think that your weighted average cost of capital is 18%. You have bank loans worth $400,000 outstanding. Part 1 Attempt 1/10 for 10 pts. What is the terminal value, i.e., the present value of all free cash flows from 2028 to infinity expressed in 2027-dollars? 0+ decimals Submit Part 2 Attempt 1/10 for 10 pts. What is the total value of the company? 0+ decimals Submit Part 3 Attempt 1/10 for 10 pts. What is the intrinsic value per share of common stock if you have 100,000 shares outstanding
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