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Question 5 Suppose Company x is expected to generate the following consecutive and annual free cash flows ( in $ millions ) of $ 4

Question 5
Suppose Company x is expected to generate the following consecutive and annual free cash
flows (in $ millions) of $475,$325, and $125 over the next 3 years. Afterward, the free cash
flows are expected to grow at a rate of 13.00% per year (that is, FCF in year 4 will be 13.00%
greater than $125, and so on). Company x has $46 million of debt, cash of $70 million, and
130 million shares outstanding. With a weighted average cost of capital of 14.00%, what is an
estimate of Company X's current stock price per share?
$89.38
$79.30
$69.92
$5.96
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