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.

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
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Suppose 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 flows
of $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 is
your estimate for the value of each share? Round to one decimal place.
Transcribed Image Text:poihts Save Answer Suppose 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 flows of $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 is your estimate for the value of each share? Round to one decimal place.
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