Question: PLEASE SHOW ALL WORK 5. Wall Inc. forecasts that it will have the free cash flows (in millions) shown below. The weighted average cost of
PLEASE SHOW ALL WORK
5. Wall Inc. forecasts that it will have the free cash flows (in millions) shown below. The weighted average cost of capital (WACC) is 10% and the free cash flows are expected to continue to grow at a constant rate of 8.2 percent after Year 3 indefinitely. \begin{tabular}{lrrr} Year & 1 & 2 & 3 \\ \hline Free cash flow & $10.00 & $48.00 & $150.50 \end{tabular} a. Calculate the firm's FCF for year 4. b. Calculate the Horizon value in year 3. c. Assuming a $150 million for the company's total market value of debt and preferred stock, and 20 million shares outstanding calculate the CURRENT intrinsic value per share. Show all your work
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
