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Ratio Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF
Ratio Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 5% rate. Ratio's WACC is 11%. Enter: Timeline: Year 1: Free Cash Flow = $14 million; Year 2: FCF = $16 million; Year 3: FCF = $25 million. a. What is Ratio's horizon, or continuing, value? b. What is the firm's value today? c. Suppose Ratio has $50.60 million of debt and 35 million shares of stock outstanding. What is your estimate of the current price per share
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