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Plane Industries is expected to generate the free cash flows over the next four years (listed below), after which they are expected to grow at
Plane Industries is expected to generate the free cash flows over the next four years (listed below), after which they are expected to grow at a rate of 5% per year. Cash flows are in millions of dollars. If the weighted average cost of capital is 12% and Plane Industries has cash of $65 million, debt of $45 million, and 30 million shares outstanding, what is Plane company's expected current share price?
Cash Flow by year
year 1: $14
year 2: $20
year 3: $22
year 4: $26
A.10.95
B. 15.10
C. 16.54
D. 12.61
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