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Year Free Cash Flow 1 $22 million 2 $26 million 3 $29 million 4 $30 million 5 $32 million General Industries is expected to generate
Year Free Cash Flow 1 $22 million 2 $26 million 3 $29 million 4 $30 million 5 $32 million General Industries is expected to generate the above free cash flows over the next five years, after which free cash flows are expected to grow at a rate of 5% per year. If the weighted average cost of capital is 10% and General Industries has cash of $20 million, debt of $40 million, and 80 million shares outstanding, what is General Industries' expected current share price? A. $6.57 B. $9.39 C. $7.51 D. $6.26
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