Talsa, Inc., an all-equity firm, operates in the growing electric vehicle market. Over the next three...

 

Transcribed Image Text:

Talsa, Inc., an all-equity firm, operates in the growing electric vehicle market. Over the next three years (T=1,2,3), Talsa, Inc., is expected to generate FCF of $2.4 billion, $3.6 billion, and $5.0 billion. After Year 3, FCF is expected to grow at a constant rate of 2.0 percent per year, resulting in an Exit Value of $51.0 billion. Talsa has 500 million shares outstanding. What is Talsa's intrinsic price/share based on a FCF valuation of the firm? Talsa, Inc., an all-equity firm, operates in the growing electric vehicle market. Over the next three years (T=1,2,3), Talsa, Inc., is expected to generate FCF of $2.4 billion, $3.6 billion, and $5.0 billion. After Year 3, FCF is expected to grow at a constant rate of 2.0 percent per year, resulting in an Exit Value of $51.0 billion. Talsa has 500 million shares outstanding. What is Talsa's intrinsic price/share based on a FCF valuation of the firm?

Answer rating: 100% (QA)

calculation Given FCF in Year 1 24 billion FCF in Year 2 36 billion FCF in Year 3 50 billion G... View the full answer