Johnson and Johnson (JNJ) is awaiting the verdict from a court case over whether it is liable for cancer caused by use of its talcum powder. If JNJ is found liable, it will have to pay massive fines and punitive damages that will reduce its free cash flow by $175 million per year for the next 15 years. JNJ has 800 million shares outstanding and has an equity cost of capital of 5%. If the court decides against JNJ, you can expect JNJs share price to decline by:

$1.75

Cannot be determined

$1.82

$2.27