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Mike Company's free cash flow is $1.75 million. Its free cash flow growth rate is expected to be constant at 25% for 2 years, after
Mike Company's free cash flow is $1.75 million. Its free cash flow growth rate is expected to be constant at 25% for 2 years, after which free cash flows are expected to grow at a rate of 6% forever. Its weighted average cost of capital WACC is 12%. Huxley has $5 million in short-term investments and $7 million in debt and has 1 million shares outstanding. What is the best estimate of the current intrinsic stock price?
| a. | $40.64 |
| b. | $44.92 |
| c. | $41.71 |
| d. | $39.58 |
| e. | $42.64 |
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