Question
Using the corporate valuation model, what is the market value of a companys operations if its Free Cash Flow (FCF) in year 1 is $5,000,000,
Using the corporate valuation model, what is the market value of a companys operations if its Free Cash Flow (FCF) in year 1 is $5,000,000, its weighted average cost of capital is 10%, and the FCF is expected to grow at a constant rate of 2%? (Recall the formula for stock pricing assuming constant growth.)
If the value of the companys non-operating assets is $3,000,000, what is the aggregate value of the company?
If the company has $2,000,000 in debt, which is trading at par, no preferred stock, and 10,000,000 shares of common stock, what is the implied value of each share of common stock?
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