A company expects to generate the free cash flow of $10 million, $20 million, and $30...

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A company expects to generate the free cash flow of $10 million, $20 million, and $30 million for the next three years. From year 4, the free cash flows are expected to have a constant growth rate of 4% indefinitely. It has 10 million shares outstanding and the debt value of $50 million. If its weighted average cost of capital is 12%, what is the equity value per share? A company expects to generate the free cash flow of $10 million, $20 million, and $30 million for the next three years. From year 4, the free cash flows are expected to have a constant growth rate of 4% indefinitely. It has 10 million shares outstanding and the debt value of $50 million. If its weighted average cost of capital is 12%, what is the equity value per share?

Answer rating: 100% (QA)

To calculate the equity value per share we need to determine the present value of future cash flows ... View the full answer