Question
You are looking to calculate a price per share on Troy Inc. You have estimated the following future free cash flows. The WACC is 7%,
You are looking to calculate a price per share on Troy Inc. You have estimated the following future free cash flows. The WACC is 7%, there are 15 million shares outstanding, the MV of debt and preferred stock is $1,350, and you believe the FCFs will grow at a constant 5% rate after year 5. Calculate the price per share using the corporate valuation model. Be sure to show all calculations.
| Year | FCF (in millions) |
| 1 | $10.0 |
| 2 | $12.5 |
| 3 | $15.0 |
| 4 | $20.0 |
| 5 | $25.0 |
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Essentials of Managerial Finance
Authors: Scott Besley, Eugene F. Brigham
14th edition
324422709, 324422702, 978-0324422702
