We want to estimate the value of Lululemon (LULU). The estimated required return is 9% and the free cash flow is $145 million and expected to grow at 8% each year for the next 2 years and then at a constant growth rate of 2.5%. The outstanding debt is $700 million, the number of shares of common stock is 18 million, and preferred stock is currently trading at $65 per share and there are 15 million shares outstanding. What is the estimated stock price today?
We want to estimate the value of Lululemon (LULU). The estimated required return is 9% and the free cash flow is $145 million and expected to grow at 8% each year for the next 2 years and then at a constant growth rate of 2.5%. The outstanding debt is $700 million, the number of shares of common stock is 18 million, and preferred stock is currently trading at $65 per share and there are 15 million shares outstanding. What is the estimated stock price today?
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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