Intro Majong Inc. forecasts that it will have the free cash flows shown below. The free...

 

Transcribed Image Text:

Intro Majong Inc. forecasts that it will have the free cash flows shown below. The free cash flows are expected to grow by 3% per year after year 3. Year 1 2 3 FCF ($ million) -20 48 54 The weighted average cost of capital is 9%. The firm has $51 million of debt and 10 million shares outstanding. Part 1 What is Majong's horizon value (in $ million)? 927 Saved Save Part 2 What is the firm value today (in $ million)? 780 Save Saved Attempt 1/1 for 10 pts. Attempt 1/1 for 10 pts. Attempt 1/1 for 10 pts. Part 3 What is a good estimate of Majong's intrinsic value per share? 0+ decimals Save Intro Majong Inc. forecasts that it will have the free cash flows shown below. The free cash flows are expected to grow by 3% per year after year 3. Year 1 2 3 FCF ($ million) -20 48 54 The weighted average cost of capital is 9%. The firm has $51 million of debt and 10 million shares outstanding. Part 1 What is Majong's horizon value (in $ million)? 927 Saved Save Part 2 What is the firm value today (in $ million)? 780 Save Saved Attempt 1/1 for 10 pts. Attempt 1/1 for 10 pts. Attempt 1/1 for 10 pts. Part 3 What is a good estimate of Majong's intrinsic value per share? 0+ decimals Save

Answer rating: 100% (QA)

To calculate Majong Incs horizon value we need to determine the present value of the growing free ca... View the full answer