A firm's end-of-year free cash flow is anticipated to be $14 million. The company's free cash...

 

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A firm's end-of-year free cash flow is anticipated to be $14 million. The company's free cash flows are expected to grow 15 percent a year forever. The firm's weighted average cost of capital is 18 percent, and the firm has 20 million common stock outstanding shares. The firm has no long-term debt in its capital structure. If the firm has $15 million in preferred stock, the firm's estimated intrinsic value of its common stock per share is $ Calculate to two decimal points using the following formula: PV = ((FCF/(WACC - g)) - total debt) / common shares. A firm's end-of-year free cash flow is anticipated to be $14 million. The company's free cash flows are expected to grow 15 percent a year forever. The firm's weighted average cost of capital is 18 percent, and the firm has 20 million common stock outstanding shares. The firm has no long-term debt in its capital structure. If the firm has $15 million in preferred stock, the firm's estimated intrinsic value of its common stock per share is $ Calculate to two decimal points using the following formula: PV = ((FCF/(WACC - g)) - total debt) / common shares.

Answer rating: 100% (QA)

First we need to calculate the free cash flow for the next year FCF1 FCF0 1g 14 million ... View the full answer