Covan, Inc. is expected to have the following free cash flow: Year FCF 1 12 2...

 

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Covan, Inc. is expected to have the following free cash flow: Year FCF 1 12 2 14 3 15 ... 16 a. Covan has 8 million shares outstanding, $4 million in excess cash, and it has no debt. If its cost of capital is 11%, what should be its stock price? b. Covan adds its FCF to cash, and has no plans to add debt. If you plan to sell Covan at the beginning of year 2, what is its expected price? e. Assume you bought Covan stock at the beginning of year 1. What is your expected return from holding Covan stock until year 27 Grow by 5% per year a. Covan has 8 million shares outstanding, 54 million in excess cash, and it has no debt. If its cost of capital is 11%, what should be its stock price? The stock price should be $ (Round to the nearest cent) Covan, Inc. is expected to have the following free cash flow: Year FCF 1 12 2 14 3 15 ... 16 a. Covan has 8 million shares outstanding, $4 million in excess cash, and it has no debt. If its cost of capital is 11%, what should be its stock price? b. Covan adds its FCF to cash, and has no plans to add debt. If you plan to sell Covan at the beginning of year 2, what is its expected price? e. Assume you bought Covan stock at the beginning of year 1. What is your expected return from holding Covan stock until year 27 Grow by 5% per year a. Covan has 8 million shares outstanding, 54 million in excess cash, and it has no debt. If its cost of capital is 11%, what should be its stock price? The stock price should be $ (Round to the nearest cent)

Answer rating: 100% (QA)

To calculate the stock price of Covan Inc we can use the free cash flows and excess cash along with the cost of capital 11 The formula to calculate th... View the full answer