Question: please answer.... please answer all parts to the question. will rate Homework: Chapter 7 Homework core: 0.5 of 1 pt 6 of 8 (8 compte

Homework: Chapter 7 Homework core: 0.5 of 1 pt 6 of 8 (8 compte HW Score: 74.2%, 5.94 of 8 pts Question Help P7-18 (similar to) Using the free cash flow valuation model to price an IPO Personal Finance Problem Assume that you have an opportunity to buy the stock of CoolTech, Inc., an IPO being offered for 5505 per share. Although you are very much interested in owing the company you are concerned about whether ist priced. To determine the value of the shares you have decided to apply the tree cash flow valuation model to the firm's financial data that youve com e from a variety of t our The key values you have compiled are summarized in the following table ml a. Use the the cash flow volution model tema CoolTech's common stock value per share b. Judging by your finding in part and the 's offering price should you buy the stock? c. On further analysis, you find that the growth rate in FCF beyond 2023 will be on other than 5% What otect would this finding have on your responses in parts and b? a. The value of CoolTech's entire company (Round to the nearest dollar) Enter your answer in the answer box and then click Check Answer 5 parts Clear AB Check Area De an IPO Personal Finance Problem Assume that you have opportunity to buy the stock of CoolTech, Inc ny, you are concerned about whether it is fairly priced. To determine the value of the shares, you have decided ety of data sources. The key values you have compiled are sumrized in wie following table, i Data Table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) FCF Free cash flow Year (t) 2020 $650,000 2021 $730,000 2022 $870,000 2023 $980,000 Other data Growth rate of FCF, beyond 2023 to infinity = 5% Weighted average cost of capital = 12% Market value of all debt = $2,350,000 Market value of preferred stock = $940,000 Number of shares of common stock to be issued = 1,100,000 Print Done en click Check Answer. Clear All
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