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Please solve this question..... Click to see additional instructions XYZ corporation has $1,320,000 of debt and $260,000 of preferred stock. The corporation's weighted average cost
Please solve this question.....
Click to see additional instructions XYZ corporation has $1,320,000 of debt and $260,000 of preferred stock. The corporation's weighted average cost of capital (WACC) is calculated 13%. The estimated free cash flows over the next 5 years, 2016 through 2020, are given in the table below. The corporation expects its free cash flow to grow at a constant rate of 4% after 2020. Year FCF 2016 $ 200,000 2017 $ 250,000 2018 $ 320,000 2019 $ 370,000 2020 $ 420,000 (Round to the nearest cents; use two decimals. The answers are in terms of dollars; provide your answers without the dollar sign, e.g., 1234.56) a. Calculate the entire value of corporation, using the free cash flow valuation model. $ b. Calculate the common stock value of the corporation. $ C. If the corporation has 100,000 shares of common stock outstanding, calculate the value per share. $Step by Step Solution
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