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need help with part C assume that you have an opportunity to buy the stock of CoolTech, Inc. an IPO for $8.70 per share. although
need help with part C
assume that you have an opportunity to buy the stock of CoolTech, Inc. an IPO for $8.70 per share. although you are very much interested in owning a company you are concerned about whether it is fairly priced. to determine the value of the shares do you have decided to apply the free cash flow valuation model to the firms financial data that you've accumulated from a variety of data sources the key values you have complied are summarized in the following table. 2020 $750,000 growth rate of FCF beyond 2023 to infinity =3% 2021 $840,000 weighted average cost of capital=13% 2022 $970,000 market value of all debt =1,950,000 2023 1,120,000 market value of preferred stock =780,000 Number of shares of common stock to be issued=1,100,000 a. Use the free cash flow valuation model to estimate CoolTechs common stock value per share b. judging by your findings and party and the stocks offering price should you buy the stock c. on further analysis you find out the growth rate in FCF will he 4% rather than 3%.. what effect would this finding have on your response in parts a&bStep by Step Solution
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