Question
You have been assigned the task of using the corporate valuation model to estimate T Corporation's intrinsic value. T's WACC is 10%, its end-of-year free
You have been assigned the task of using the corporate valuation model to estimate T Corporation's intrinsic value. T's WACC is 10%, its end-of-year free cash flow (FCF) is expected to be 75 million, the FCF's are expected to grow at a rate of 10 % for 4 years and then at a constant rate of 5.5% per year in the future, the company has 400 million of long-term debt plus preferred stock and it has 50 million shares of common stock outstanding and 20million in cash and marketable securities. What is the company's estimated intrinsic value per share of common stock?(6 marks)
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