Sims Manufacturing is expected to generate $180 million in free cash flow next year, and FCF is expected to grow at a constant rate of 4% per year indefinitely. Sims has no debt or preferred stock and its required rate of return is 11%. If Sims has 50 million shares of common stock outstanding, what is the stocks value per share?

Sims Manufacturing is expected to generate $180 million in free cash flow next year, and FCF is expected to grow at a constant rate of 4% per year indefinitely. Sims has no debt or preferred stock and its required rate of return is 11%. If Sims has 50 million shares of common stock outstanding, what is the stocks value per share?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 13P

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