Suppose your company's WACC= 15% and you know that the free cash flow of your company...
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Suppose your company's WACC= 15% and you know that the free cash flow of your company next year is going to be FCF1 = $22.45 and then FCF is expected to grow at 9%. Then the FCF2 is and the company's horizon value in one year is This means that the firm's value today is The following table shows projected free cash flows for the next four years for Quick Sky Corp., a company producing wind turbines. Free Cash Flow Year (Millions of dollars) 1 22.45 24.47 26.67 29.07 2 3 4 After the four year period, Quick Sky is expected to grow at a constant rate of 9% and its WACC is 15%. Quick Sky has $15 million of debt and $195 million shares of stock outstanding. Quick Sky's value today is million and the price per share today is Suppose your company's WACC= 15% and you know that the free cash flow of your company next year is going to be FCF1 = $22.45 and then FCF is expected to grow at 9%. Then the FCF2 is and the company's horizon value in one year is This means that the firm's value today is The following table shows projected free cash flows for the next four years for Quick Sky Corp., a company producing wind turbines. Free Cash Flow Year (Millions of dollars) 1 22.45 24.47 26.67 29.07 2 3 4 After the four year period, Quick Sky is expected to grow at a constant rate of 9% and its WACC is 15%. Quick Sky has $15 million of debt and $195 million shares of stock outstanding. Quick Sky's value today is million and the price per share today is
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Answer rating: 100% (QA)
Here are the steps to solve this problem 1 FCF2 FCF1 1 growth rate 2245 1 9 2447 2 Horizon value ... View the full answer
Related Book For
Fundamentals of Corporate Finance
ISBN: 9780133400694
1st canadian edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi
Posted Date:
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