Using the free cash flow valuation model to price as IPO Personal Finance Pot Asume you to the of Colleck, Company, you are concerned about w hat is tary priced Toomine the value of the share you have decided to apply the tree cashow valios modelo you have come u n teolowing PO berg offered for 8 per the Athough your very much in uning the s tnancial anal you've accumulated from a variety of sources The key va a. Use the free cash flow valuation mode to estimate CoolTech's common stock value per share b. Judging by your naingin pala and the stock i ng price should you buy the sto? e. On the you find that the grown in FCF beyond 2023 will be 45. rather than 3% Wheelect would this finding a. The of CoolTech's entre compar o und to the newest on your responses in parts and The value per share of common stockis o und to the recent b. On the basis of your ndngn part and the stock's ofteng pece should you buy the stock? Select the best answer below) Ne Yes c. the growth ratio in FCF beyond 2021 will be the value of CoolTech's entire company wil Round to the newest dolar) The value per shore of Cooler's common stockis (Round to the nearest cent On the basis of your finding in parte and the stocks ng price should you buy the stock Select the best below OAN OB. Yes Using the free cash flow valuation model to price an IPO Personal Finance Problem Assume that you have an opportunity to buy the stock of CoolTech, Inc., an IPO being offered for $6 98 per share Although you are very much interested in owning the company, you are concerned about whether it is fairly priced. To determine the value of the shares, you have decided to apply the free cash fow valuation model to the firm's financial data that you've accumulated from a variety of data sources. The key values you have compiled are summarized in the following table, a. Use the free cash flow valuation model to estimate CoolTech's common stock value per share b. Judging by your finding in part a and the stock's offering price should you buy the stock? c. On further analysis, you find that the growth rate in FCF beyond 2023 will be 4% rather than 3%. What offect would this finding have on your responses in parts a and b? a. The value of CoolTech's antire company is $ (Round to the nearest dollar) The value per share of CoolTech's common stock is $ . Round to the nearest cont.) b. On the basis of your finding in parta and the stock's offering price should you buy the stock? (Select the best answer below) O No Yes Using the free cash flow valuation model to price an IPO Personal Finance Problem Assume that you have an opportunity to buy the stock of CoolTech, Inc., an IPO being offered for $698 per share. Although you are very much interested in owning the company, you are concerned about whether it is fairly priced. To determine the value of the shares, you have decided to apply the free cash flow valuation model to the firm's financial data that you've accumulated from a variety of data sources. The key values you have compiled are summarized in the following table, a. Use the free cash flow valuation model to estimate CoolTech's common stock value per share b. Judging by your finding in parta and the stocks offering price should you buy the stock? c. On further analysis, you find that the growth rato in FCF beyond 2023 will be 4% rather than 3%. What effect would this finding have on your responses in parts a and b? c. If the growth rate in FCF beyond 2023 will be 4%, the value of CoolTech's entire company will be s Round to the nearest dollar) The value per share of CoolTech's common stockis (Round to the nearest cont.) On the basis of your finding in partc and the stock's offering price should you buy the stock? (Select the best answer below.) O A. No OB. Yes Click to select your answers) i Data Table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Free cash flow Year (t) FCF 2020 $680,000 2021 $810,000 2022 $930,000 $1,010,000 Other data Growth rate of FCF, beyond 2023 to infinity = 3% Weighted average cost of capital = 14% Market value of preferred stock = $640,000 Number of shares of common stock to be issued = 1,100,000 Done