Covan, Inc. is expected to have the following free cash flow: a. Covan has 7 million shares outstanding, $3 million in excess cash, and it has no debt. If its cost of capital is 12%, what should be its stock price? Covan reinvests all its FCF and has no plans to add debt or change its cash holdings. If you plan to sell Covan at the beginning of year 2, what is its expected price? c. Assume you bought Covan stock at the beginning of year 1. What is your expected return from holding Covan stock until year 2? a. Covan has 7 million shares outstanding, $3 million in excess cash, and it has no debt. If its cost of capital is 12%, what should be its stock price? The current stock price should be $ (Round to the nearest cent.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 1 2 3 4 FCF ($ million) 12 14 15 16 Grow by 3% per year Print Done - X

Covan, Inc. is expected to have the following free cash flow: a. Covan has 7 million shares outstanding, $4 million in excess cash, and it has no debt. If its cost of capital is 12%, what should be its stock price? b. Covan adds its FCF to cash, and has no plans to add debt. If you plan to sell Covan at the beginning of year 2, what is its expected price? c. Assume you bought Covan stock at the beginning of year 1. What is your expected return from holding Covan stock until year 2? a. Covan has 7 million shares outstanding, $4 million in excess cash, and it has no debt. If its cost of capital is 12%, what should be its stock price? The stock price should be $ (Round to the nearest cent.) b. Covan adds its FCF to cash, and has no plans to add debt. If you plan to sell Covan at the beginning of year 2, what is its expected price? If you plan to sell Covan at the beginning of year 2, its price should be $ (Round to the nearest cent.) c. Assume you bought Covan stock at the beginning of…

Covan, Inc. is expected to have the following free cash flow: a. Covan has 8 million shares outstanding, $3 million in excess cash, and it has no debt. If its cost of capital is 11%, what should be its stock price? b. Covan adds its FCF to cash, and has no plans to add debt. If you plan to sell Covan at the beginning of year 2, what is its expected price? c. Assume you bought Covan stock at the beginning of year 1. What is your expected return from holding Covan stock until year 2? a. Covan has 8 million shares outstanding, $3 million in excess cash, and it has no debt. If its cost of capital is 11%, what should be its stock price? The stock price should be $ (Round to the nearest cent.) A b. Covan adds its FCF to cash, and has no plans to add debt. If you plan to sell Covan at the beginning of year 2, what is its expected price? If you plan to sell Covan at the beginning of year 2, its price should be $ (Round to the nearest cont.) c. Assume you bought Covan stock at the beginning of…

Covan, Inc. is expected to have the following free cash flow: a. Covanhas 6million shares outstanding, $4 million in excess cash, and it has no debt. If its cost of capital is 10% what should be its stock price? Covanreinvests all its FCF and has no plans to add debt or change its cash holdings. If you plan to sell Covanat the beginning of year 2, what is its expected price? c. Assume you bought Covanstock at the beginning of year 1. What is your expected return from holding Covanstock until year 2? a. Covan has 6 million shares outstanding, $4 million in excess cash, and it has no debt. If its cost of capital is 10%, what should be its stock price? The current stock price should be $ 23.47. (Round to the nearest cent.) Covan reinvests all its FCF and has no plans to add debt or change its cash holdings. If you plan to sell Covan at the beginning of year 2, what is its expected price? If you plan to sell Covan at the beginning of year 2, its price should be $ (Round to the nearest…