Over the past year, a company generated free cash flows of $6M. You expect them to grow at a constant rate of 3.5% forever. 

Here is some other information on the company's capitalization: 

                                                Market Value      Book Value 

Number of shares Debt             $1.4M             $1.9M n/a 

Preferred Stock                       $7/share             $8/share 500,000 

The company's shareholders expect a 10.5% return on investments of this risk. The company's WACC is 8%. If the company has 2.5 million common shares, how much is each share worth?

Answer rating: 100% (QA)

Each Share Worth 5324 Explanation Enterprises Value FCFF0 x ... View the full answer