11 Portage Bay Enterprises has $2 million in excess cash, no debt, and is expected to have free cash flow of $11 million nextyear. Its FCF is then expected to grow at a rate of 2% per year forever. If Portage Bay's equity cost of capital is 12% and ithas 8 million shares outstanding, what should be the price of Portage Bay stock?CREEDThe price of Portage Bay's stock is $ per share. (Round to the nearest cent.)

To calculate the equity value of the firm and the stock price we need to calculate the enterprise…

Answered: Portage Bay Enterprises has $2 million…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 12P

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NoGrowth Corporation currently pays a dividend of $2.00 per year, and it will continue to pay this dividend forever. What is the price per share if its equity cost of capital is 15% per year? The price per share if its equity cost of capital is 15% per y ear is $_______ (Round to the nearest cent.)
Portage Bay Enterprises has $1 million in excess cash, no debt, and is expected to have free cash flow of $ 9 million next year. Its FCF is then expected to grow at a rate of 3% per year forever. If Portage Bay's equity cost of capital is 13% and it has 8 million shares outstanding, what should be the price of Portage Bay stock?
K Portage Bay Enterprises has 54 million in excess cash, no debt, and is expected to have free cash flow of $15 milion next year Its FCF is then expected to grow at a rate of 2% per year forever. If Portage Bay's equity cost of capital is 13% and it has 6 million shares outstanding, what should be the price of Portage Bay stock? The price of Portage Bay's stock is Sper share (Round to the nearest cent) CITTC
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