**Projected Free Cash Flow and Firm Valuation of ABC Telecom Inc.**ABC Telecom Inc. is projected to generate a free cash flow (FCF) of $1,910.00 million this current year. The FCF is anticipated to grow at a rate of 19.00% over the following two years. After the third year, the FCF will grow at a steady rate of 2.10% per year indefinitely.To determine the current total firm value of ABC Telecom Inc., consider that its weighted average cost of capital (WACC) is 6.30%. Follow the calculations with rounding to two decimal places.**Options for Total Firm Value:**- $6,060.06 million- $72,959.93 million- $71,811.25 million- $60,799.94 million**Evaluation of Intrinsic Value Per Share**ABC Telecom Inc. has a market debt value of $45,600 million and has no preferred stock issued. With 675 million shares of common stock outstanding, the estimated intrinsic value per share of common stock must be calculated.**Options for Intrinsic Value Per Share:**- $22.52- $67.56- $24.77- $21.52**Note:** It is essential to round all intermediate calculations to two decimal places to ensure accuracy in financial assessments.

FCF0 = $1,910.00 millionGrowth rate for 2 years = 19.00%Growth rate thereafter = 2.10%WACC =…

ABC Telecom Inc. is expected to generate a free cash flow (FCF) of $1,910.00 million this year (FCF, = $1,910.00 million), and the FCF is expected to grow at a rate of 19.00% over the following two years (FCF, and FCF). After the third year, however, the FCF is expected to grow at a constant rate of 2.10% per year, which will last forever (FCF). Assume the firm has no nonoperating assets. If ABC Telecom Inc.'s weighted average cost of capital (WACC) is 6.30%, what is the current total firm value of ABC Telecom Inc.? (Note: Round all intermediate calculations to two decimal places.) $6,060.06 million O $72,959.93 million $71,811.25 million O $60,799.94 million ABC Telecom Inc.'s debt has a market value of $45,600 million, and ABC Telecom Inc. has no preferred stock. If ABC Telecom Inc. has 675 million shares of common stock outstanding, what is ABC Telecom Inc.'s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.) $22.52 O $67.56 $24.77 O $21.52

ABC Telecom Inc. is expected to generate a free cash flow (FCF) of $1,910.00 million this year (FCF, = $1,910.00 million), and the FCF is expected to grow at a rate of 19.00% over the following two years (FCF, and FCF). After the third year, however, the FCF is expected to grow at a constant rate of 2.10% per year, which will last forever (FCF). Assume the firm has no nonoperating assets. If ABC Telecom Inc.'s weighted average cost of capital (WACC) is 6.30%, what is the current total firm value of ABC Telecom Inc.? (Note: Round all intermediate calculations to two decimal places.) $6,060.06 million O $72,959.93 million $71,811.25 million O $60,799.94 million ABC Telecom Inc.'s debt has a market value of $45,600 million, and ABC Telecom Inc. has no preferred stock. If ABC Telecom Inc. has 675 million shares of common stock outstanding, what is ABC Telecom Inc.'s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.) $22.52 O $67.56 $24.77 O $21.52

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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