Question
MBX is a new firm that will generate free cash flows of $100 billion in year 1 and growing at a rate of 5% a
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MBX is a new firm that will generate free cash flows of $100 billion in year 1 and growing at a rate of 5% a year thereafter. If the MBX cost of capital is 10% and it has neither debt nor cash then by issuing 100 million shares the price of MBX stock will be:
a. $200 per share
b. $10 per share
c. $20 per share
d. $100 per share
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Principles Of Macroeconomics
Authors: Frank, Bernanke, Antonovics, Heffetz
3rd Edition
1259117162, 9781259117169
