Year Free cash flow to the firm 1 2 3 4 $15 million $20 million $25 million $30 million Conundrum Mining is expected to generate the above free cash flows over the next four years, after which they are expected to grow at a rate of 3% per year. If the weighted average cost of capital is 15% and Conundrum has cash of $85 million, debt of $65 million, and 30 million shares outstanding, what is Conundrum's expected current share price? Oa. $6.53 b. $6.16 Oc. $6.99 O d. $7.63

Year Free cash flow to the firm 1 2 3 4 $15 million $20 million $25 million $30 million Conundrum Mining is expected to generate the above free cash flows over the next four years, after which they are expected to grow at a rate of 3% per year. If the weighted average cost of capital is 15% and Conundrum has cash of $85 million, debt of $65 million, and 30 million shares outstanding, what is Conundrum's expected current share price? Oa. $6.53 b. $6.16 Oc. $6.99 O d. $7.63

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 18P: Free Cash Flow Valuation Dozier Corporation is a fast-growing supplier of office products. Analysts...

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