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AccountingQ&A LibraryFree Cash Flow Valuation Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 5% rate. Dozier's weighted average cost of capital is WACC = 14%. Year 1 2 3 Free cash flow ($ millions) -$20 $30 $40 What is Dozier's horizon value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Round your answer to two decimal places.$ million What is the current value of operations for Dozier? Do not round intermediate calculations. Round your answer to two decimal places.$ million Suppose Dozier has $10 million in marketable securities, $100 million in debt, and 10 million shares of stock. What is the intrinsic price per share? Do not round intermediate calculations. Round your answer to the nearest cent.$Question

Free Cash Flow Valuation

Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 5% rate. Dozier's weighted average cost of capital is WACC = 14%.

Year | |||

1 | 2 | 3 | |

Free cash flow ($ millions) | -$20 | $30 | $40 |

- What is Dozier's horizon value? (
*Hint*: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Round your answer to two decimal places.

$ million - What is the current value of operations for Dozier? Do not round intermediate calculations. Round your answer to two decimal places.

$ million - Suppose Dozier has $10 million in marketable securities, $100 million in debt, and 10 million shares of stock. What is the intrinsic price per share? Do not round intermediate calculations. Round your answer to the nearest cent.

$

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