Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Omni Consumer Products Co . is expected to generate a free cash flow ( FCF ) of $ 6 5 0 . 0 0 million

Omni Consumer Products Co. is expected to generate a free cash flow (FCF) of $650.00 million this year (FCF= $650.00 million), and the FCF is expected to grow at a rate of 26.20% over the following two years (FCF and FCF). After the third year, however, the FCF is expected to grow at a constant rate of 4.26% per year, which will last forever (FCF). Assume the firm has no nonoperating assets. If Omni Consumer Products Co.s weighted average cost of capital (WACC) is 12.78%, what is the current total firm value of Omni Consumer Products Co.?(Note: Round all intermediate calculations to two decimal places.)
$12,928.82 million
$14,611.01 million
$1,942.93 million
$10,774.02 million
Omni Consumer Products Co.s debt has a market value of $8,081 million, and Omni Consumer Products Co. has no preferred stock. If Omni Consumer Products Co. has 450 million shares of common stock outstanding, what is Omni Consumer Products Co.s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.)
$4.98
$17.96
$6.58
$5.98

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions