A company is projected to generate free cash flows of $457 million next year, growing at a 4.4% rate until the end of year 3. After that, cash flows are expected to grow at a stable rate of 2.8%. The company's cost of capital is 10.1%. The company owes $268 million to lenders and has $24 million in cash. If it has 179 million shares outstanding, what is your estimate for its share value? Round to one decimal place.
A company is projected to generate free cash flows of $457 million next year, growing at a 4.4% rate until the end of year 3. After that, cash flows are expected to grow at a stable rate of 2.8%. The company's cost of capital is 10.1%. The company owes $268 million to lenders and has $24 million in cash. If it has 179 million shares outstanding, what is your estimate for its share value? Round to one decimal place.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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