Year 1 2 3 4 Free cash flow to the firm $15 million $20 million $25 million $30 million Conundrum Mining is expected to generate the above free cash flows over the next four years, after which they are expected to grow at a rate of 3% per year. If the weighted average cost of capital is 15% and Conundrum has cash of $85 million, debt of $65 million, and 30 million shares outstanding, what is Conundrum's expected current share price? a. $6.16 O b. $6.99 O c. $6.53 O d. $7.63
Year 1 2 3 4 Free cash flow to the firm $15 million $20 million $25 million $30 million Conundrum Mining is expected to generate the above free cash flows over the next four years, after which they are expected to grow at a rate of 3% per year. If the weighted average cost of capital is 15% and Conundrum has cash of $85 million, debt of $65 million, and 30 million shares outstanding, what is Conundrum's expected current share price? a. $6.16 O b. $6.99 O c. $6.53 O d. $7.63
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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