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CORPORATE VALUATION Dantzler 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. Dantzler’s WACC is 11%. a. What is Dantzler’s horizon, or continuing, value? (Flint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) b. What is the firm’s value today? c. Suppose Dantzler has $112.60 million of debt and 25 million shares of stock outstanding. What is your estimate of the current price per share?

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Fundamentals of Financial Manageme...

15th Edition
Eugene F. Brigham + 1 other
Publisher: Cengage Learning
ISBN: 9781337395250
BuyFind

Fundamentals of Financial Manageme...

15th Edition
Eugene F. Brigham + 1 other
Publisher: Cengage Learning
ISBN: 9781337395250

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Chapter 9, Problem 15P
Textbook Problem

CORPORATE VALUATION Dantzler 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. Dantzler’s WACC is 11%.

Chapter 9, Problem 15P, CORPORATE VALUATION Dantzler Corporation is a fast-growing supplier of office products. Analysts

  1. a. What is Dantzler’s horizon, or continuing, value? (Flint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.)
  2. b. What is the firm’s value today?
  3. c. Suppose Dantzler has $112.60 million of debt and 25 million shares of stock outstanding. What is your estimate of the current price per share?

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Chapter 9 Solutions

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