A company is forecasted to generate free cash flows of $29 million next year and $29 million the year after. After that, cash flows are projected to grow at a stable rate in perpetuity. The company's cost of capital is 10.3%. The company has $66 million in debt, $15 million of cash, and 16 million shares outstanding. Using an exit multiple for the company's free cash flows (EV/FCFF) of 18, what's your estimate of the company's stock price? O a. 30.8 O b. 26.8 O c. 14.9 O d. 10.6 e. 18.0

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A:

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A: Value of Firm = FCF1/(1+WACC)^1 +FCF2/(1+WACC)^2 +Terminal Flow/(1+WACC)^2 FCF1 = -$10 million FCF2…

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A: SOLUTION- FREE CASH FLOWS IS THE CASH A COMPANY GENERATES AFTER TAKING IN TO CONSIDERATION CASH…

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A: In this question we have two parts and we need to answer that: a) What is the value of the firm…

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A: A)

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A:

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A: Formulas:

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A: The question gives the following information:

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