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Problem 5. Common Stock Pricing. FCF Model Using the following timeline of FCF estimation to figure out the company's security price. -Point: 2 Company llama
Problem 5. Common Stock Pricing. FCF Model Using the following timeline of FCF estimation to figure out the company's security price. -Point: 2 Company llama is estimated to have FCF of -12 Millions, -14 Millions, -25 Millions, and 40 Millions from year 1 to year 4. After that, its FCF is estimated to grow at at 8% per year starting with year 5. WACC Year 1 Debt 2 FCF (in $Millions) -12 -14 -25 40 Cash 3 # Shares Outstanding 4 5 Company llama has $40 Millions in cash and $5 Millions in debt. It has 1 million shares of common : Assuming its WACC is 15% What is its security value per share? Your Answer: Your solution below
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