Question
Portage Bay Enterprises has $2 million in excess cash, no debt, and is expected to have free cash flow of $15 million next year. Its
Portage Bay Enterprises has $2 million in excess cash, no debt, and is expected to have free cash flow of $15 million next year. Its FCF is then expected to grow at a rate of 4% per year forever. If Portage Bay's equity cost of capital is12% and it has 7 million shares outstanding, what should be the price of Portage Bay stock?
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Personal Finance
Authors: Jeff Madura
5th edition
132994348, 978-0132994347
