Answered step by step
Verified Expert Solution
Question
1 Approved Answer
RBG, Inc. FCFs over the next 3 years are projected to be FCF1 = $3 million, FCF2 = $5 million, FCF3 = $8 million and
RBG, Inc. FCFs over the next 3 years are projected to be FCF1 = $3 million, FCF2 = $5 million, FCF3 = $8 million and free cash flows are projected to grow at 4% per year thereafter. RBG, Inc. also has the following information: Market value of RBG Debt = $150 million Short-term investments = $75 million Book value of equity = $160 million Total Assets = $180 million Shares outstanding = 2.5 million Required return on stock = 11% WACC = 9% Calculate RBG's intrinsic equity value per share.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started