Question
Mezze & Sons is a successful Lebanese dips and sauces manufacturer. It wants to sell its shares to Kebbeh & Sons and wants to value
Mezze & Sons is a successful Lebanese dips and sauces manufacturer. It wants to sell its shares to Kebbeh & Sons and wants to value its stock. The projected free cash flows for the next 3 years are as follows: $1 million, $2 million, and $8 million. After the third year, free cash flow is projected to grow at a constant 3%. Mezze's WACC is 8%, the market value of its debt and preferred stock totals $47 million, and it has 13 million shares of common stock outstanding. a) What is the firm's total value today? b) What is an estimate of Mezzes price per share?
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