A company's free cash flows are given as: Year 1 = $4000 Year 2 = $5000 Year 3 = $6000.

An expert analysis shows that after 3 years (t=3), the free cash flow of the company will grow at a constant rate of 7% per year. The expert evaluates that the weighted average cost of capital of the company is 11%. Also, the total market value of debt and preferred stock of the company is $30,000. Outstanding shares of common stock are 1000.

Calculate the intrinsic value per share of the common stock of the company.

Answer rating: 100% (QA)

SOLUTION To calculate the intrinsic value per share of the common stock of the company we need to us... View the full answer