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ST investments$100 Debt$272 Preferred stock$0 Outstanding common shares320 Year 0 FCF($20)Year 1 FCF($55) Year 2 FCF$2 Year 3 FCF$50 Year 4 FCF$200 Constant growth rate
ST investments$100 Debt$272 Preferred stock$0 Outstanding common shares320 Year 0 FCF($20)Year 1 FCF($55) Year 2 FCF$2 Year 3 FCF$50 Year 4 FCF$200 Constant growth rate after Year 46% WACC10%
Use the data provided in the spreadsheet to estimate dans intrinsic value per share of common stock. Show your calculations.
In an alternate universe, the Alt-dans Company has a WACC of only 8%. All other data is the same as for the Dan's in our universe. Which company has the higher intrinsic value per common share? Why?
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