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11. More on the corporate valuation model Praxis Corp. is expected to generate a free cash flow (FCF) of $11,375.00 million this year (FCF = $11,375.00 million), and the FCF is expected to grow at a rate of 25.00% over the following two years (FCF₂ and FCF3). After the third year, however, the FCF is expected to grow at a constant rate of 3.90% per year, which will last forever (FCF4). Assume the firm has no nonoperating assets. If Praxis Corp.'s weighted average cost of capital (WACC) is 11.70%, what is the current total firm value of Praxis Corp.? (Note: Round all intermediate calculations to two decimal places.) $271,083.87 million $204,208.90 million $245,050.68 million $34,332.59 million Praxis Corp.'s debt has a market value of $153,157 million, and Praxis Corp. has no preferred stock. If Praxis Corp. has 225 million shares of common stock outstanding, what is Praxis Corp.'s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.) $680.70 $226.90 $225.90 $249.59

11. More on the corporate valuation model Praxis Corp. is expected to generate a free cash flow (FCF) of $11,375.00 million this year (FCF = $11,375.00 million), and the FCF is expected to grow at a rate of 25.00% over the following two years (FCF₂ and FCF3). After the third year, however, the FCF is expected to grow at a constant rate of 3.90% per year, which will last forever (FCF4). Assume the firm has no nonoperating assets. If Praxis Corp.'s weighted average cost of capital (WACC) is 11.70%, what is the current total firm value of Praxis Corp.? (Note: Round all intermediate calculations to two decimal places.) $271,083.87 million $204,208.90 million $245,050.68 million $34,332.59 million Praxis Corp.'s debt has a market value of $153,157 million, and Praxis Corp. has no preferred stock. If Praxis Corp. has 225 million shares of common stock outstanding, what is Praxis Corp.'s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.) $680.70 $226.90 $225.90 $249.59

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**11. More on the corporate valuation model** Praxis Corp. is expected to generate a free cash flow (FCF) of $11,375.00 million this year (FCF₁ = $11,375.00 million), and the FCF is expected to grow at a rate of 25.00% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 3.90% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Praxis Corp.'s weighted average cost of capital (WACC) is 11.70%, what is the current total firm value of Praxis Corp.? **(Note**: Round all intermediate calculations to two decimal places.) - $271,083.87 million - $204,208.90 million - $245,050.68 million - $34,332.59 million Praxis Corp.'s debt has a market value of $153,157 million, and Praxis Corp. has no preferred stock. If Praxis Corp. has 225 million shares of common stock outstanding, what is Praxis Corp.'s estimated intrinsic value per share of common stock? **(Note**: Round all intermediate calculations to two decimal places.) - $680.70 - $226.90 - $225.90 - $249.89
Transcribed Image Text:**11. More on the corporate valuation model** Praxis Corp. is expected to generate a free cash flow (FCF) of $11,375.00 million this year (FCF₁ = $11,375.00 million), and the FCF is expected to grow at a rate of 25.00% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 3.90% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Praxis Corp.'s weighted average cost of capital (WACC) is 11.70%, what is the current total firm value of Praxis Corp.? **(Note**: Round all intermediate calculations to two decimal places.) - $271,083.87 million - $204,208.90 million - $245,050.68 million - $34,332.59 million Praxis Corp.'s debt has a market value of $153,157 million, and Praxis Corp. has no preferred stock. If Praxis Corp. has 225 million shares of common stock outstanding, what is Praxis Corp.'s estimated intrinsic value per share of common stock? **(Note**: Round all intermediate calculations to two decimal places.) - $680.70 - $226.90 - $225.90 - $249.89
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