Question
Luthor Corp is expected to generate a free cash flow of $8,636.00 million this year and the FCF is expected to grow at a rate
Luthor Corp is expected to generate a free cash flow of $8,636.00 million this year and the FCF is expected to grow at a rate of 21.40% over the following two years. After the third year, however, the FCF is expected to grow at a constant rate of 2.82% per year, which will last forever. If Luthor corp's weighted average cost of capital is 8.46%, what is the current total firm value of Luthor corp? a) $255,854 million b) $26,536 million c) $206,270 million d) $247,524 million
Luthor corp's debt has a market value of $154,703 million and they have no preferred stock. If Luthor Corp has 750 million shares of common stock outstanding, what is their estimated intrinsic value per share of common stock? a) $75.63 b) $206.27 c) $67.76 d) $68.75
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