Question: Smith and T Co. is expected to generate a free cash flow (FCF) of $10,435.00 million this year (FCF1 = $10,435.00 million), and the FCF

Smith and T Co. is expected to generate a free cash flow (FCF) of $10,435.00 million this year (FCF1 = $10,435.00 million), and the FCF is expected to grow at a rate of 22.60% over the following two years (FCF2 and FCF. After the third year, however, the FCF is expected to grow at a constant rate of 3.18% per year, which will last forever (FCF). If Smith and T Co.'s weighted average cost of capital (WACC) is 9.54%, what is the current total firm value of Smith and T Co.? O $32,121.32 million O $270,859.32 million O $286,576.82 million O $225,716.10 million Smith and T Co.'s debt has a market value of $169,287 million, and Smith and T Co. has no preferred stock. If Smith and T Co. has 300 million shares of common stock outstanding, what is Smith and T Co.'s estimated intrinsic value per share of common stock? O $564.29 O $188.10 O $206.91 O $187.10
Step by Step Solution
There are 3 Steps involved in it
To find the current total firm value of Smith and T Co follow these steps Step 1 Calculate FCF for Y... View full answer
Get step-by-step solutions from verified subject matter experts
