Lex Corp. is expected to generate a free cash flow (FCF) of $10,150.00 million this year (FCF₁ = $10,150.00 million), and the FCF is expected to grow at a rate of 20.20% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 2.46% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Lex Corp.’s weighted average cost of capital (WACC) is 7.38%, what is the current total firm value of Lex Corp.? (Note: Round all intermediate calculations to two decimal places.) $337,274.05 million $31,877.51 million $334,241.74 million $278,534.78 million
Lex Corp. is expected to generate a free cash flow (FCF) of $10,150.00 million this year (FCF₁ = $10,150.00 million), and the FCF is expected to grow at a rate of 20.20% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 2.46% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Lex Corp.’s weighted average cost of capital (WACC) is 7.38%, what is the current total firm value of Lex Corp.? (Note: Round all intermediate calculations to two decimal places.) $337,274.05 million $31,877.51 million $334,241.74 million $278,534.78 million
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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Lex Corp. is expected to generate a free cash flow (FCF) of $10,150.00 million this year (FCF₁ = $10,150.00 million), and the FCF is expected to grow at a rate of 20.20% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 2.46% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Lex Corp.’s weighted average cost of capital (WACC) is 7.38%, what is the current total firm value of Lex Corp.? (Note: Round all intermediate calculations to two decimal places.)
$337,274.05 million
$31,877.51 million
$334,241.74 million
$278,534.78 million
Lex Corp.’s debt has a market value of $208,901 million, and Lex Corp. has no preferred stock . If Lex Corp. has 750 million shares of common stock outstanding, what is Lex Corp.’s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.)
$91.85
$278.53
$102.13
$92.85
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