Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sims Manufacturing is expected to generate $160 million in free cash flow next year, and FCF is expected to grow at a constant rate of

Sims Manufacturing is expected to generate $160 million in free cash flow next year, and FCF is expected to grow at a constant rate of 5% per year indefinitely. Sims has no debt or preferred stock, and its required rate of return is 8%.

If Sims has 75 million shares of common stock outstanding, what is the stock's value per share?

(Answer to the nearest cent. i.e. one thousand dollars would be entered 1000.00).

Your Answer:

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Complete Guide To Capital Markets For Quantitative Professionals

Authors: Alex Kuznetsov

1st Edition

0071468293, 978-0071468299

More Books

Students also viewed these Finance questions

Question

Describe new developments in the design of pay structures. page 475

Answered: 1 week ago