The Insincerity Company expects free cash flow of $4.5 million, $7.3 million, and $7.9 million in the next three fiscal years (the first cash flow being exactly one year from now). After that, free cash flow growth in years 4 - 8 will be at the compound annual growth rate of cash flow from years 1 - 3, and then slow to just 2.5% per annum (forever). If the firm has a current debt load of $19 million, a WACC of 12%, and 2.9 million shares outstanding, what is each share worth?

Answer rating: 100% (QA)

Worth of each share 4128 Stepbystep explanation Answer 1 FCF in year 1 45 million ... View the full answer