The first acquisition target is a privately held company in a mature industry owned by two brothers, each with 50 shares of stock The company currently has free cash flow of $24 million Its WACC is 11 and it is expected to grow at a constant rate of 5 The company owns marketable securities of $100 ...

The first acquisition target is a privately held company in a mature industry owned by two brothers,

Question:

The first acquisition target is a privately held company in a mature industry owned by two brothers, each with 50 shares of stock. The company currently has of $24 million. Its WACC is 11% and it is expected to grow at a constant rate of 5%. The company owns marketable securities of $100 million. It is financed with $200 million of debt, $50 million of preferred stock, and $210 million of book equity. What is its value of operations?

Free Cash Flow
Free cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Unlike earnings or net income, free cash flow is a measure of profitability that excludes the...