Question
Praxis Corp. is expected to generate a free cash flow (FCF) of $13,135.00 million this year (FCF, $13,135.00 million), and the FCF is expected
Praxis Corp. is expected to generate a free cash flow (FCF) of $13,135.00 million this year (FCF, $13,135.00 million), and the FCF is expected to grow at a rate of 20.20% over the following two years (FCF, and FCF,). After the third year, however, the FCF is expected to grow at a constant rate of 2.46% per year, which will last forever (FCF.). Assume the firm has no nonoperating assets. If Praxis Corp.'s weighted average cost of capital (WACC) is 7.38%, what is the current total firm value of Praxis Corp.? (Note: Round all intermediate calculations to two decimal places.) $360,448.84 million $436,462.70 million $432,538.61 million $41,252.33 million Praxis Corp.'s debt has a market value of $270,337 million, and Praxis Corp. has no preferred stock. If Praxis Corp. has 600 million shares of common stock outstanding, what is Praxis Corp.'s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.) $150.19 $450.56 $149.19 $165.21
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started