A company is projected to have a free cash flow of $243 million next year, growing at a 5.6% rate until the end of year 3. After that, cash flows are expected to grow at a stable rate of 2.1%. The company's cost of capital is 12.7%. The company owes $71 million to lenders and has $17 million in cash. If it has 221 million shares outstanding, what is your estimate for its stock price? Round to one decimal place.

Answer rating: 100% (QA)

To estimate the stock price of the company we will use the discounted cash flow DCF model We will calculate the present value of all future cash flows ... View the full answer