Sims Manufacturing is expected to generate $195 million in free cash flow next year, and FCF is expected to grow at a constant rate of 6% per year indefinitely. Sims has no debt or preferred stock, and its required rate of return is 12%. If Sims has 45 million shares of common stock outstanding, what is the stock's value per share?
Sims Manufacturing is expected to generate $195 million in free cash flow next year, and FCF is expected to grow at a constant rate of 6% per year indefinitely. Sims has no debt or preferred stock, and its required rate of return is 12%. If Sims has 45 million shares of common stock outstanding, what is the stock's value per share?
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 13P
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Sims Manufacturing is expected to generate $195 million in
If Sims has 45 million shares of common stock outstanding, what is the stock's value per share?
(Answer to the nearest cent. i.e. one thousand dollars would be entered 1000.00).
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