Year 1 FCF -$22.18 $38.1 $43.8 $51.3 $56.4 The weighted average cost of capital is 9%, and the FCFs are expected to continue growing at a 5% rate after Year 5. The firm has $24 million of market-value debt, but it has no preferred stock or any other outstanding claims. There are 20 million shares outstanding. Also, the firm has zero non-operating assets. What is the value of the stock price today (Year 0)? Round your answer to the nearest cent. Do not round intermediate calculations. 2 3 4 5
Year 1 FCF -$22.18 $38.1 $43.8 $51.3 $56.4 The weighted average cost of capital is 9%, and the FCFs are expected to continue growing at a 5% rate after Year 5. The firm has $24 million of market-value debt, but it has no preferred stock or any other outstanding claims. There are 20 million shares outstanding. Also, the firm has zero non-operating assets. What is the value of the stock price today (Year 0)? Round your answer to the nearest cent. Do not round intermediate calculations. 2 3 4 5
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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Give typing answer with explanation and conclusion
Transcribed Image Text:Year 1
2
3
4
5
FCF -$22.18 $38.1 $43.8 $51.3 $56.4
The weighted average cost of capital is 9%, and the FCFs are expected to continue growing at a 5% rate after Year 5. The
firm has $24 million of market-value debt, but it has no preferred stock or any other outstanding claims. There are 20
million shares outstanding. Also, the firm has zero non-operating assets. What is the value of the stock price today (Year
0)? Round your answer to the nearest cent. Do not round intermediate calculations.
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