Question
Suppose ABC Inc will have cash flows from assets (CFFA) next year of $85 million. The appropriate discount rate for CFFA is 18%, and its
Suppose ABC Inc will have cash flows from assets (CFFA) next year of $85 million. The appropriate discount rate for CFFA is 18%, and its CFFA is expected to grow at 4% per year forever. ABC Inc has 40 million shares outstanding, $100 million in net debt. Net debt is defined as the market value of debt minus the book value of cash on the balance sheet.
What is the price per share for ABC Inc's stock?
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Financial Management Theory and Practice
Authors: Eugene F. Brigham, Michael C. Ehrhardt
15th edition
130563229X, 978-1305632301, 1305632303, 978-0357685877, 978-1305886902, 1305886909, 978-1305632295
