Question
The free cash flow of firm ABC next year is expected to be $2,000,000 (FCF1). The cost of equity for the firm is 14%, and
The free cash flow of firm ABC next year is expected to be $2,000,000 (FCF1). The cost of equity for the firm is 14%, and the weighted average cost of capital (WACC) is 10%. Free cash flow is expected to grow at a constant 5% rate. The firm has $10,000,000 of debt outstanding and 3,000,000 shares of stock outstanding. What is the value of the company's stock?
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Financial Informatics An Information Based Approach To Asset Pricing
Authors: Dorje C Brody, Lane Palmer Hughston, Andrea Macrina
1st Edition
9811246483, 978-9811246487
