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Suppose a firm's FCF is expected to be $30mn in year one, $20mn in year two and thereafter, the firm's FCFs are expected to increase

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Suppose a firm's FCF is expected to be $30mn in year one, $20mn in year two and thereafter, the firm's FCFs are expected to increase by 5% a year for the foreseesble future. Further suppose that the market value of the firm's debt is $50mn and the market value of the firm's preferred stock is $20mn and that the firm has 20 milion shares of common stock outstanding. If the required return on the firm's assets is 10%, how much should the stock price per share be selling for? $9.10 $6.27 $10.50 $13.32 Page 23 ot 25

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