Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Lex Corp. is expected to generate a free cash flow (FCF) of $7,520.00 million this year (FCF1 = $7,520.00 million), and the FCF is expected

image text in transcribed

Lex Corp. is expected to generate a free cash flow (FCF) of $7,520.00 million this year (FCF1 = $7,520.00 million), and the FCF is expected to grow at a rate of 21.40% over the following two years (FCF, and FCF3). After the third year, however, the FCF is expected to grow at a constant rate of 2.82% per year, which will last forever (FCFA). Assume the firm has no nonoperating assets. If Lex Corp.'s weighted average cost of capital (WACC) is 8.46%, what is the current total firm value of Lex Corp.? (Note: Round all intermediate calculations to two decimal places.) $218,088.55 million $23,380.60 million $225,428.30 million $181,740.46 million Lex Corp.'s debt has a market value of $136,305 million, and Lex Corp. has no preferred stock. If Lex Corp. has 675 million shares of common stock outstanding, what is Lex Corp.'s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.) $66.31 $67.31 $201.93 $74.04

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Real Estate Finance

Authors: Walt Huber, Levin P. Messick

5th Edition

0916772438, 9780916772437

More Books

Students also viewed these Finance questions

Question

=+What is your personal mission statement?

Answered: 1 week ago