Talsa, Inc., an all-equity firm, operates in the growing electric vehicle market. Over the next three years (T 1,2,3), Talsa, Inc., is expected to generate FCF of $2.4 billion, $3.6 billion, and $5.0 billion. After Year 3, FCF is expected to grow at a constant rate of 3.0 percent per year, resulting in an Exit Value of $57.22 billion. Talsa has 500 million shares outstanding. What is Talsa's intrinsic price/share based on a FCF valuation of the firm?

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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Talsa, Inc., an all-equity firm, operates in the growing electric vehicle market. Over the next three
years (T 1,2,3). Talsa, Inc., is expected to generate FCF of $2.4 billion, $3.6 billion, and $5.0 billion.
After Year 3, FCF is expected to grow at a constant rate of 3.0 percent per year, resulting in an Exit
Value of $57.22 billion. Talsa has 500 million shares outstanding. What is Talsa's intrinsic
price/share based on a FCF valuation of the firm?
O $89.74
O $101.33
O $98.60
Ⓒ$95.55
FOR OA
Transcribed Image Text:Talsa, Inc., an all-equity firm, operates in the growing electric vehicle market. Over the next three years (T 1,2,3). Talsa, Inc., is expected to generate FCF of $2.4 billion, $3.6 billion, and $5.0 billion. After Year 3, FCF is expected to grow at a constant rate of 3.0 percent per year, resulting in an Exit Value of $57.22 billion. Talsa has 500 million shares outstanding. What is Talsa's intrinsic price/share based on a FCF valuation of the firm? O $89.74 O $101.33 O $98.60 Ⓒ$95.55 FOR OA
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