You estimate the market value of the company. The value of the firm if it were unlevered
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You estimate the market value of the company. The value of the firm if it were unlevered is $600 million. The company has long-term debt $20 million. Assume the company will increase the debt to $25 million for next year, $28 million for one year after and $30 million for two-year after. After that, the company will keep debt level as $30 million for the remaining future. Company’s corporate tax rate is 20% and the current cost of debt is 5%. Both will remain the same as current year in the future. what is the current stock price per share?
Related Book For
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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