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Posted on Sep 01, 2024

Suppose the free cash flow to the firm is expected to be $ 1 mil for year 1 and $ 2 mil for year 2

Suppose the free cash flow to the firm is expected to be $

1

mil for year

1

and $

2

mil for year

2 .

Then it is expected to grow at a rate of

5 %

per year. The firms has $

5

mil of debt and its WACC is

13 % .

If the firm If

500, 000

shares of stock are outstanding, what is the predicted price of the stock? Round your answer to two decimal places.

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