Question: Please show how to solve using excel and how you get to the value per share. Houda Motors has just announced results that show that
Please show how to solve using excel and how you get to the value per share.
Houda Motors has just announced results that show that the FCF for the past year is $23 million. An experienced analyst believes that the growth rate of FCF for the next 10 years will be 25% per year and that after 10 years the growth rate will stabilize at 7% annually. Houda's WACC is 18% and it has 100 million shares outstanding. (Hint: You can find the FCFs for each year, but you can also value this using only formulas, you've got a fast-growing annuity and then a growing perpetuity as the two components of value here!) PUT YOUR ANSWERS HERE! a) Value the shares assuming that the FCFs occur at year-end. Houda has no debt and no excess cash reserves. b) Re-value the shares assuming that the FCFs occur at mid-year
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