The Garcia Group is a large holding company of luxury brands. An analyst for Goldman Sachs projects

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The Garcia Group is a large holding company of luxury brands. An analyst for Goldman Sachs projects that Garcia's Free Cash Flows will grow by 10% per year for six years, decline to 5% per year for the following six years, a finally decline to a long-run growth rate of 2% per year forever. Garcia just reported free cash flow of $40,000,000 and has a WACC of 14%.

a. What is the Horizon Value for the Garcia Group?
b. If Garcia has 15,000,000 shares outstanding what is the value of each share of stock?
c. If Garcia has $150,000,000 of debt outstanding, what is the value of each share of stock?

Posted Date: Mar 27, 2022 09:18 AM

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The Garcia Group is a large holding company of luxury brands. An analyst for Goldman Sachs projects

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