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John Adam, an analyst with T.D. Wyse Securities, is trying to evaluate Company As target stock price per share. Free cash flow (FCF) estimates for
John Adam, an analyst with T.D. Wyse Securities, is trying to evaluate Company As target stock price per share. Free cash flow (FCF)estimates for the next 3 years are -$2, $15, and $20 million, after which the FCF is expected to grow at 5%. The overall firm cost of capital is 10%. The firm has $45 million in debt and has 16 million shares of stock. What is the estimated value per share? Show your calculations.
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