Question
Use the following information and a Free Cash Flow to the Firm model to calculate the stock price for BT, Inc. Show your work. Year
- Use the following information and a Free Cash Flow to the Firm model to calculate the stock price for BT, Inc. Show your work.
| Year | CF to Firm |
| 1 | 800 |
| 2 | 800 |
| 3 | 800 |
| Terminal Value in Year 3 | 28,000 |
|
|
|
|
|
|
| CAPM Equity Return | 0.09 |
| WACC | 0.07 |
| Market Value of Debt | 12,000 |
| Book Value of Debt | 13,000 |
| Cash & Marketable Securities | 500 |
| Shares Outstanding | 1,500 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
13th Edition
1260772381, 978-1260772388
