Atchley Corporation's last free cash flow was $1.55 million. The free cash flow growth rate to be constant at 1.5% for 2 years, after which free cash flows are expected to grow at a rate of 8.0% forever. The firm's weighted average cost of capital (WACC) is 12.0%. Atchley has $2 million in short-term debt and $14 million in debt and 1 million shares outstanding. What is the best estimate of the intrinsic stock price?

Answer rating: 100% (QA)

Free Cash flow in year0 155 million growth rate in 2 year... View the full answer