You are valuing a company for possible acquisition. The target is expected to produce operating cash flow of $$4\mathrm{.}2$ million and spend $$1\mathrm{.}0$ million on capex next year, paying $$0\mathrm{.}5$ million in taxes. The OCF and taxes and capex expected to grow by $2\%$ per year forever. The discount rate is $12\%.$

The firm has $$11$ million face value of bonds outstanding. The bonds are currently trading at $93$ cents on the dollar.

With $2\mathrm{.}2$ million shares outstanding, what is the value per share?

Group of answer choices

$$27\mathrm{.}92$

$$11\mathrm{.}95$

$$7\mathrm{.}62$

$$22\mathrm{.}22$

$$33\mathrm{.}08$You are valuing a company for possible acquisition. The target is expected to produce

operating cash flow of $$4\mathrm{.}2$ million and spend $$1\mathrm{.}0$ million on capex next year, paying $$0\mathrm{.}5$

million in taxes. The OCF and taxes and capex expected to grow by $2\%$ per year forever. The

discount rate is $12\%.$

The firm has $$11$ million face value of bonds outstanding. The bonds are currently trading at

$93$ cents on the dollar.

With $2\mathrm{.}2$ million shares outstanding, what is the value per share?

$$27\mathrm{.}92$

$$11\mathrm{.}95$

$$7\mathrm{.}62$

$$22\mathrm{.}22$

$$33\mathrm{.}08$