A company is forecasted to generate free cash flows of $64 million for the next three years. After that, cash flows are projected to grow at a 2.8% annual rate in perpetuity. The company's cost of capital is 11.9%. The company has $61 million in debt, $6 million of cash, and 16 million shares outstanding. What's the value of each share? a. 63.3 b. 48.3 C. 42.0 d. 29.3 e. 38.4

A company is forecasted to generate free cash flows of $64 million for the next three years. After that, cash flows are projected to grow at a 2.8% annual rate in perpetuity. The company's cost of capital is 11.9%. The company has $61 million in debt, $6 million of cash, and 16 million shares outstanding. What's the value of each share? a. 63.3 b. 48.3 C. 42.0 d. 29.3 e. 38.4

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 15P

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