A company is projected to have a free cash flow of $357 million next year, growing at a 4.4% rate until the end of year 3. After that, cash flows are expected to grow at a stable rate of 2.4%. The company's cost of capital is 9.3%. The company owes $129 million to lenders and has $8 million in cash. If it has 279 million shares outstanding, what is your estimate for its stock price? Round to one decimal place.

A company is projected to have a free cash flow of $357 million next year, growing at a 4.4% rate until the end of year 3. After that, cash flows are expected to grow at a stable rate of 2.4%. The company's cost of capital is 9.3%. The company owes $129 million to lenders and has $8 million in cash. If it has 279 million shares outstanding, what is your estimate for its stock price? Round to one decimal place.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 15P

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