Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Praxis Corp. is expected to generate a free cash flow (FCF) of $6,530.00 million this year (FCF,=$6,530.00 million), and the FCF is expected to grow

image text in transcribed
Praxis Corp. is expected to generate a free cash flow (FCF) of $6,530.00 million this year (FCF,=$6,530.00 million), and the FCF is expected to grow at a rate of 19.00% over the following two years (FCF, and FCF,). After the third year, however, the FCF is expected to grow at a constant rate of 2.10% 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 6.30\%, what is the current total firm value of Praxis Corp.? (Note: Round all intermediate calculations to two decimal places.) $249,438.90 million $245,511.75 million $207,865.75 million $20,718.42 million Praxis Corp.'s debt has a market value of $155,899 million, and Praxis Corp. has no preferred stock. If Praxis Corp. has 225 million shares of corkmon stock outstanding, what is Praxis Corp.'s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.) $692.89 $229.96$254.06$230.96

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essential Finance Guide

Authors: DK Publishing

1st Edition

078948157X, 978-0789481573

More Books

Students also viewed these Finance questions