Question
Kindly help I'll surely give thumps for correct answer. Assume you've forecasted and calculated the following Free Cash Flows to the Firm. Year FCFF 1
Kindly help I'll surely give thumps for correct answer.
Assume you've forecasted and calculated the following Free Cash Flows to the Firm.
Year
FCFF
1 : $7,389
2: $8,993
3: $9,744
You have also made the assumption that after year 3, the company will grow by a rate of 2.8%.
Further suppose that the company has a current share price of $88.99 and a total of 4.5 million shares outstanding. The company currently has debt with a total face value of $891 million. These outstanding bonds are currently priced to yield 8.9% while quoting at 97% of total face value. The current t-bill rate is 1.1% and the market risk premium is 5.3%. We've estimated the to be 1.84. The marginal tax rate is 21%. Given this information, what is the value of this firm?
- $189,971
- $167,016
- $167,360
- $156,307
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