Question: need quick, will like! Covan, Inc. is expected to have the following free cash flow. a. Covan has 7 mition shares outstanding. $2 mition in

need quick, will like!
need quick, will like! Covan, Inc. is expected to have the following

Covan, Inc. is expected to have the following free cash flow. a. Covan has 7 mition shares outstanding. $2 mition in excess cash, and it has no debt if is 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? c. Assume you bought Covan stock at the beginning of year 1 What is your expected return from holding Covan stock until year 2 ? a. Covan has 7 milion shares outstanding. $2 mullion in excess cash, and it has no debt if its cost of capital is 11%, what shoula be its stock price? The stock price should be s (Round to the nearest cent) 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? If you plan to sell Covan at the beginning of year 2 , its pnce should bes (Round to the nearest cent) c. Assume you bought Covan stock at the beginning of year 1 What is your expected retum from holding Covan stock until yeat 2 ? Your expected return from holding Covan stock untal the beginning of year 2 is \% (Round to one decimal place) Data table

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!