Question
Please Show all work Find the share value for a company with the following information: Free cash flow in 2021 is expected to be $90,00
Please Show all work
Find the share value for a company with the following information:
Free cash flow in 2021 is expected to be $90,00
Free cash flow in 2022 is expected to be $95,000
Free cash flow in 2023 is expected to be $100,000
Estimated growth rate of cash flows beyond 2023 = 2.75%
The companys WACC is 9.5% and they have $0.5mm of debt
The company has 50,000 shares outstanding
They plan to pay quarterly dividends of $.25, $.30, and $.25 over each of the next 3 years, with the dividend increasing by 3% annually thereafter.
a) What is the share value using the free cash flow valuation method?
b) What is the share value using the dividend growth model?
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