ABC Corporation's latest free cash flow (FCF0) was $40.00 million. The growth rate in FCFs is assumed to be constant at the rate of 3% a year for future periods. ABC has 45 million shares of common stock outstanding and $550 million of long-term debt, including preferred stock. The WACC of the corporation is 8%. What is the value of the entire corporation? What is ABC's common stock value? What is the ABC's estimated price per share?

ABC Corporation's latest free cash flow (FCF0) was $40.00 million. The growth rate in FCFs is assumed to be constant at the rate of 3% a year for future periods. ABC has 45 million shares of common stock outstanding and $550 million of long-term debt, including preferred stock. The WACC of the corporation is 8%. What is the value of the entire corporation? What is ABC's common stock value? What is the ABC's estimated price per share?

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 6MC

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