From year 6, the company generates free cashflow at a constant growth rate, 5%. Suppose the cost

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From year 6, the company generates free cashflow at a constant growth rate, 5%. Suppose the cost of equity is 10%, the cost of debt is 5%, and the tax rate is 30%. The debt to equity ratio is 1. The total debt is 10 million dollars. The total number of shares outstanding is 500 million shares. The company has $10 million cash in its bank account. What is the stock price per share based on given information, using enterprise value model? Note that enterprise value model considers the different discount if the cashflow is received in the middle point of a year.

Posted Date: Dec 13, 2021 03:00 AM

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From year 6, the company generates free cashflow at a constant growth rate, 5%. Suppose the cost

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Answer Stock price per share 090 Explanation 1 Calculation of enterprise value i Calculation of WACC ... View the full answer

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