Question
Itab Shop Concept AB is expected to generate the following free cash flows over the next five years: Year 1 2 3 4 5 FCF
Itab Shop Concept AB is expected to generate the following free cash flows over the next five years:
Year | 1 | 2 | 3 | 4 | 5 |
FCF ($ million) | 53 | 68 | 78 | 75 | 82 |
After year 5, the free cash flows are expected to grow at the industry average of 3.0% per year. Using the discounted free cash flow model and assuming a cost of capital of 9.5%,
a. Estimate the enterprise value of Itab Shop Concept.
Itab's enterprise value is $ million. (round to the nearest million).
b. If Itab Shop Concept has no excess cash, debt of $300 million, and 40 million shares outstanding, estimate Itab's share price.
Itab's equity value is $ million. (round to the nearest million)
Itab's stock price is $. (in dollar, round to two decimals)
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