Question: Estimate the expected stock price from the data below. (40 points) WACC=10%; Short term investments = $ 100 million; Debt = $200 million; Preferred stock

Estimate the expected stock price from the data below. (40 points)

Estimate the expected stock price from the data below. (40 points) WACC=10%; Short term investments = $ 100 million; Debt = $200 million; Preferred stock =$50 million; Number of shares = n = 10 million Finance expansion financed by owners projected free cash flows (FCFS) Year 1 FCF = -$10 million Year 2 FCF = $20 million FCF grows at constant rate of 5% after year 2. No change in WACC, marketable securities, debt, preferred stock, or number of shares of stock

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