cob-principles-of-managerial-finance-Ide (4).pdf (SECURED-Adobe Acrobat Reader DC File Edit View Window Help Home Tools cob-principles_of....x Sign In 11096 Personal Finance Problem Using the free cash flow valuation model to price an IPO Assume that you have an opportunity to buy the stock of CoolTech, Inc., an IPO being offered for $12.50 per share. Although you are very much interested in owning the company, you are con- cerned about whether it is fairly priced. To determine the value of the shares, you have decided to apply the free cash flow valuation model to the firm's financial data that you've developed from a variety of data sources. The key values you have com piled are summarized in the following table. Export PDF ^ P7-17 Adobe Export PDF Convert PDF Files to Word or Excel Online Select PDF File cob-principl...e_14e (4).pdfX Free cash flow Convert to FCF Other data Microsoft Word (doo) 2016 2017 2018 2019 $ 700,000 | Growth rate of FCF' beyond 2019 to infinity = 2% 800,000 | Weighted average cost of capital = 8% 950,000Market value of all debt S2,700,000 Document Language English (U.S) Change Market value of preferred stock-SI,000,000 Number of shares of common stock outstanding 1,100,000| 1,100,000 Convert a. Use the free cash flow valuation model to estimate CoolTech's common stock b. Judging on the basis of your finding in part a and the stock's offering price, c. On further analysis, you find that the growth rate in FCF beyond 2019 will be value per share. should you buy the stock? 3% rather than 2%. What cffect would this finding have on your responses in Create PDF Store and share files in the Document Cloud parts a and b? Learn More LG 5 P7-18 Book and liquidation value The balance sheet for Gallinas Industries is as follows. Co 12:32 AM O Type here to search 11/14/2017