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Question 6 Homestead Corporation is a fast-growing supplier of consumer products. Analysts project the following free cash flow (FCF) during the next three years (year
Question 6 Homestead Corporation is a fast-growing supplier of consumer products. Analysts project the following free cash flow (FCF) during the next three years (year 1: -$20 millions; year 2: $30 millions, year 3: $40 millions), after which FCF is expected to grow at a constant 7% rate. The company's cost of capital is WACC = 13%. Suppose that the firm has $10 millions in marketable securities, $100 millions in debt, and 10 million shares of stock. What's the price per share PPS? Show your calculations
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