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You are about to take over a car leasing company with Free Cash Flow to the Firm projected to be $9 million at the end
You are about to take over a car leasing company with Free Cash Flow to the Firm projected to be $9 million at the end of the next year. This is expected to grow by 2% in the following year, and forever thereafter. The firm owes the bank $20 million and has just lost a lawsuit making it liable to pay the complainant $5 million. The appropriate risk adjusted annual discount rate is 10%. How much is this company worth per share if there are 2 million shares outstanding? Select one: a. $35.76 b. $41.88 c. $43.75 d. $39.03
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