Question
KANASAS FOOD has 300,000 shares outstanding, debt of $9,000,000, and cash of $400,000. The firm is expecting fixed free cash flows of $2,000,000 for 2
KANASAS FOOD has 300,000 shares outstanding, debt of $9,000,000, and cash of $400,000. The firm is expecting fixed free cash flows of $2,000,000 for 2 years. After that, free cash flows are expected to grow by 7.0% per year. The weighted-average cost of capital for High Point Grill is 16.2%. Use DCF analysis to estimate the share price of KANSAS stock.
| What is the price per share of KANASAS FOOD based on the discounted cash flow (DCF) method of valuation? |
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The New Public Finance
Authors: Inge Kaul, Pedro Condeicao
1st Edition
0195179978, 978-0195179972
