Question
Tito Industries began operations in January of 2020. Presented below is selected financial information pertaining to Tito Industries: 2020 2021 2022 Price 28.73 29.32 30.26
Tito Industries began operations in January of 2020. Presented below is selected financial information pertaining to Tito Industries:
|
| 2020 | 2021 | 2022 |
| Price | 28.73 | 29.32 | 30.26 |
| Earnings per share | 1.86 | 2.01 | 2.44 |
| Free cash flow per share | 3.66 | 3.31 | 3.96 |
Tito Industries currently has $11.34 per share in debt and a discount rate of 9.37 percent (a rate based upon Tito Industries asset beta). Based upon the free cash flow model, Tito Industries has an expected stock price of
| a. | $15.40 | |
| b. | $39.49 | |
| c. | $46.23 | |
| d. | $65.65 | |
| e. | $76.99 |
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Financial Management Principles And Practice
Authors: Timothy J. Gallagher, Joseph D. Andrew
3rd Edition
0131768824, 978-0131768826
