Question
Portage Bay Enterprises has $ 4 million in excess cash, no debt, and is expected to have free cash flow of $ 13 million next
Portage Bay Enterprises has $ 4 million in excess cash, no debt, and is expected to have free cash flow of $ 13 million next year. Its FCF is then expected to grow at a rate of 2 % per year forever. If Portage Bay's equity cost of capital is 10 % and it has 4 million shares outstanding, what should be the price of Portage Bay stock?
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Financial Econometrics
Authors: Peijie Wang
1st Edition
0415426693, 978-0415426695
