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Ward Corp. is expected to have a free cash flow of $1,200,000 next year. Cas flows are expected to grow at a rate of 17% for four years. The company curre $12 million in debt and c

Ward Corp. is expected to have a free cash flow of $1,200,000 next year. Cas flows are expected to grow at a rate of 17% for four years. The company curre $12 million in debt and c

Essentials Of Investments
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
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Ward Corp. is expected to have a free cash flow of $1,200,000 next year. Cash flows are expected to grow at a rate of 17% for four years. The company currently has $13 million in debt and 800,000 shares of common stock outstanding. After year 5, free cash flow is expected to grow at a rate of 3% indefinitely. The company's WACC is 8.5% and the tax rate is 35%. What is the price per share of equity for Ward Corp?
Transcribed Image Text:Ward Corp. is expected to have a free cash flow of $1,200,000 next year. Cash flows are expected to grow at a rate of 17% for four years. The company currently has $13 million in debt and 800,000 shares of common stock outstanding. After year 5, free cash flow is expected to grow at a rate of 3% indefinitely. The company's WACC is 8.5% and the tax rate is 35%. What is the price per share of equity for Ward Corp?
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