You have been asked to use the free cash flow model to estimate Microsoft's ordinary share value. Microsofts weighted average cost of capital is 10%, its next end-of-year free cash flow (FCF) is expected to be $300.0 million, the FCFs are expected to grow at a constant rate of 8% per year in the future, the company has long-term debt plus preference shares worth a total of $800 million, and it has 300 million ordinary shares outstanding. What is Microsoft's estimated price per ordinary share?

Select one:

a.

$59.50

b.

$50.00

c.

$56.00

d.

$46.00

e.

$47.33

Clear my choice