Pls show proper steps correctly with explanation. Ward Corp. is expected to have a freecash flow of $1,200,000 next year. Cashflows are expected to grow at a rate of17% for four years. The company currentlyhas $13 million in debt and 800,000shares of common stock outstanding.After year 5, free cash flow is expectedto grow at a rate of 3% indefinitely. Thecompany's WACC is 8.5% and the taxrate is 35%. What is the price per share ofequity for Ward Corp?

Share price refers to the price per share prevailing in the market or investor needs to pay for…

Answered: Ward Corp. is expected to have a free…

Ward Corp. is expected to have a free cash flow of $1,200,000 next year. Cas flows are expected to grow at a rate of 17% for four years. The company curre $12 million in debt and c

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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Question

Pls show proper steps correctly with explanation.

Ward Corp. is expected to have a free
cash flow of $1,200,000 next year. Cash
flows are expected to grow at a rate of
17% for four years. The company currently
has $13 million in debt and 800,000
shares of common stock outstanding.
After year 5, free cash flow is expected
to grow at a rate of 3% indefinitely. The
company's WACC is 8.5% and the tax
rate is 35%. What is the price per share of
equity for Ward Corp?

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