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solve all parts New Millenium Company earned $2.5 million in net income last yea. preciation deductions of $300,000 and made new investments in working capital
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New Millenium Company earned $2.5 million in net income last yea. preciation deductions of $300,000 and made new investments in working capital and fixed assets of $100,000 and $350,25. pectively a. What was New Millenium's free cash flow last year? b. Suppose that the company's free cash flow is expected to grow at 5% per year forever. If investors require a return of 8% on Millenium stock, what is the present value of Millenium's future free cash flows? c. New Millenium has 3.5 million shares of common stock outstanding. What is the per-share value of the company's common stock? d. What is the company's P/E ratio based on last year's earnings (i e, trailing eamings)? e. What is the company's P/E ratio based on next year's eamings (assuming that earnings grow at the same rate as free cash flow) Step by Step Solution
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