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Microsoft forecasts its free cash flows to be $2 million in one year and $6 million in two years. After the second year, free cash
Microsoft forecasts its free cash flows to be $2 million in one year and $6 million in two years. After the second year, free cash flows are projected to grow at a constant 3% rate. Microsoft's WACC is 10%, the market value of its debt is $19 million, it has $1 million in cash, and it has 8 million shares of common stock outstanding.
a. What is the enterprise value today?
b. what is microsoft's current price per share?
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