Orange Co.’s free cash flows for the next 4 years as follows: $3 million, $6 million, $8 million, and
$16 million. After the fourth year, free cash flow is projected to grow at a constant 3%. Orange Co.’s
WACC is 9%, the market value of its debt and preferred stock totals $75 million; and it has 7.5 million
shares of common stock outstanding.
• What is the company’s estimated price per share?

Answer rating: 100% (QA)

Calculate the estimated price per share Step 1 Calculate the present value of the free cash flows Us... View the full answer