Question: Question 4.) General Electrics (GE) is expected to generate free cash flows of $30 million next year which will grow at a constant rate of

Question 4.) General Electrics (GE) is expected to generate free cash flows of $30 million next year which will grow at a constant rate of 2% per year indefinitely. GE has no debt or preferred stock, and its cost of capital (WACC) is 5.25%. If GE has 50 million shares of stock outstanding what is the stocks value per share? Please show your work.

Answer: $18.46

Please do not use ChatGPT

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

1. If a company is expected to generate free cash flows of $30 million next year (year T+1), what is its Terminal Value this year (year T). The company is expected to grow its cash flows at a steady...

1. A company is expected to generate free cash flows of $ 75 million next year which is expected to grow at a constant rate of 5% per year. The company has $100 million in debt and $50 million in...

QUESTION 17 Rivermoon Corporation is expected to generate free cash flows of $175 million next year, and its FCF is expected to grow at a constant rate of 6.0% per year indefinitely. The company has...

A company is expected to generate free cash flows of $50 million per year for the next five years. After the fifth year, the free cash flows are expected to grow at a constant rate of 3%...

The company is expected to generate Free Cash Flows of $200 million per year for the next three years. After that, FCFs are expected to grow at a constant rate of 5% per year into the foreseeable...

Can anyone give detailed explanation to this question? Thanks~ KD Industries is expected to generate free cash flow of $200 million next year. Since next year, the free cash flow is expected to grow...

Parminder Partners is expected to generate free cash flows of $4 million per year for the next 5 years, after which they are expected to grow at a rate of 3% per year. The firm currently has $2...

1. Consider a company that is forecasted to generate free cash flows of $29 million next year and $24 million the year after. After that, cash flows are projected to grow at a stable rate of 1.7% in...

Parminder Partners is expected to generate free cash flows of $4 million per year for the next 5 years, after which they are expected to grow at a rate of 3% per year. The firm currently has $2...

At what position and on what ring do you expect nitration of 4-bromo- biphenyl to occur? Explain, using resonance structures of the potentialintermediates. 4-Bromobiphenyl Br

Megan Haak and Kathy Quandt borrowed $15,000 on a 7-month, 8% note from Golden State Bank to open their business, MKs Coffee House. The money was borrowed on June 1, 2012, and the note matures...

Which of the following is a form of program trading? index arbitrage wild card arbitrage triangular arbitrage timing arbitrage none of the above

Add "Viggo Mortenslet cast = new Map ( ) ;en " to the cast as the key, with value "Aragorn".