Question
Praxis Corp. is expected to generate a free cash flow (FCF) of $2,875.00 million this year (FCF1 = $2,875.00 million), and the FCF is expected
Praxis Corp. is expected to generate a free cash flow (FCF) of $2,875.00 million this year (FCF1 = $2,875.00 million), and the FCF is expected to grow at a rate of 26.20% over the following two years (FCF 2 = and FCF 3). After the third year, however, the FCF is expcected to grow at a constant rate of 4.26% per year, which will last forever (FCF 4). If Praxis Corp.'s weighted average cost of capital (WACC) is 12.78%, what is the current total firm value of Praxis Corp.?A. $8,593.74 million B. $64,625.55 million C. $47,654.29 million D. $57,185.15 million Praxis Corp.'s debt has a market value of $35,741 million, and Praxis Corp. has no preferred stock. If Praxis Corp. has 225 million shares of common stock outstanding, what is Praxis Corp.'s estimated intrinsic value per share of common stock? A. $51.95 B. $158.85 C. $52.95 D. $58.24
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