Scampini Technologies is expected to generate $200 million in free cash flow next year, and FCF...

Scampini Technologies is expected to generate $200 million in free cash flow next year, and FCF is expected to grow at a constant rate of 6% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 11%. If Scampini has 35 million shares of stock outstanding, what is the stock's value per share? Do not round intermediate calculations. Round your answer to the nearest cent.

Each share of common stock is worth $ , according to the corporate valuation model.

Solutions

Expert Solution

The company doesn't have debt or preferred share, so, the free cash flows will belong to the shareholders as they are the owners of the company.

Using Discounted cash flow method

So, Terminal Value = Free cash flow for next year /( WACC - growth rate)

= 200 / ( 11% -6%)

= 200 / 5%

= 4000 Millions

Share Price = Terminal Value / Number of shares

= 4000 Millions / 35 Millions

= $114.285714286

Share Price = $114.285714286

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

Scampini Technologies is expected to generate $50 million in free cash flow next year, and FCF...

Scampini Technologies is expected to generate $50 million in free cash flow next year, and FCF is expected to grow at a constant rate of 4% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 15%. If Scampini has 35 million shares of stock outstanding, what is the stock's value per share? Do not round intermediate calculations. Round your answer to the nearest cent.

Scampini Technologies is expected to generate $25 million in free cash flow next year, and FCF...

Scampini Technologies is expected to generate $25 million in free cash flow next year, and FCF is expected to grow at a constant rate of 5% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 15%. If Scampini has 45 million shares of stock outstanding, what is the stock's value per share? Do not round intermediate calculations. Round your answer to the nearest cent. Each share of common stock is worth $ , according to the...

Luthor Corp. is expected to generate free cash flow (FCF) of $7,790.00 million this year (FCF₁...

Luthor Corp. is expected to generate free cash flow (FCF) of $7,790.00 million this year (FCF₁ = $7,790.00 million), and the FCF is expected to grow at a rate of 21.40% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 2.82% per year, which will last forever (FCF₄). Assume the firm has no non-operating assets. If Luthor Corp.’s weighted average cost of capital (WACC) is...

Acme Inc. is expected to generate a free cash flow (FCF) of $15,290.00 million this year...

Acme Inc. is expected to generate a free cash flow (FCF) of $15,290.00 million this year (FCF₁ = $15,290.00 million), and the FCF is expected to grow at a rate of 25.00% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 3.90% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Acme Inc.’s weighted average cost of capital (WACC)...

Luthor Corp. is expected to generate a free cash flow (FCF) of $5,740.00 million this year...

Luthor Corp. is expected to generate a free cash flow (FCF) of $5,740.00 million this year (FCF₁ = $5,740.00 million), and the FCF is expected to grow at a rate of 23.80% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 3.54% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Luthor Corp.’s weighted average cost of capital (WACC)...

Widget Corp. is expected to generate a free cash flow (FCF) of $9,835.00 million this year...

Widget Corp. is expected to generate a free cash flow (FCF) of $9,835.00 million this year (FCF₁ = $9,835.00 million), and the FCF is expected to grow at a rate of 19.00% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 2.10% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Widget Corp.’s weighted average cost of capital (WACC)...

Praxis Corp. is expected to generate a free cash flow (FCF) of $135.00 million this year...

Praxis Corp. is expected to generate a free cash flow (FCF) of $135.00 million this year (FCF₁ = $135.00 million), and the FCF is expected to grow at a rate of 19.00% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 2.10% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Praxis Corp.’s weighted average cost of capital (WACC)...

Omni Consumer Products Co. is expected to generate a free cash flow (FCF) of $2,875.00 million this year (FCF₁ = $2,875.00 million)

Omni Consumer Products Co. is expected to generate a free cash flow (FCF) of $2,875.00 million this year (FCF₁ = $2,875.00 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 Omni Consumer Products Co.’s weighted average...

Smith and T Co. is expected to generate a free cash flow (FCF) of $8,210.00 million...

Smith and T Co. is expected to generate a free cash flow (FCF) of $8,210.00 million this year (FCF₁ = $8,210.00 million), and the FCF is expected to grow at a rate of 23.80% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 3.54% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Smith and T Co.’s weighted average...

Extensive Enterprise Inc. is expected to generate a free cash flow (FCF) of $12,815.00 million this...

Extensive Enterprise Inc. is expected to generate a free cash flow (FCF) of $12,815.00 million this year (FCF₁ = $12,815.00 million), and the FCF is expected to grow at a rate of 21.40% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 2.82% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Extensive Enterprise Inc.’s weighted average cost of...

Subjects