#20. poihtsSave AnswerSuppose you are valuing a company that is growing its free cash flows at a stable 1.6% annual rate in perpetuity. It is projected to generate free cash flowsof $172 million next year and its cost of capital is 12.2%. Debt is $460 million, cash balance is $163 million, and shares outstanding is 182 million. What isyour estimate for the value of each share? Round to one decimal place.

In this problem we have to calculate present value of cash flow and find out value of equity.

Suppose you are valuing a company that is growing its free cash flows at a stable 1.6% annual rate in perpetuity. It of $172 million next year and its cost of capital is 12.2%. Debt is $460 million, cash balance is $163 million, and sha your estimate for the value of each share? Round to one decimal place.

Suppose you are valuing a company that is growing its free cash flows at a stable 1.6% annual rate in perpetuity. It of $172 million next year and its cost of capital is 12.2%. Debt is $460 million, cash balance is $163 million, and sha your estimate for the value of each share? Round to one decimal place.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter15: Distributions To Shareholders: Dividends And Repurchases

Section: Chapter Questions

Problem 3MC: Assume that IWT has completed its IPO and has a $112.5 million capital budget planned for the coming...

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