A company is forecasted to generate free cash flows of $23 million next year and $25...

A company is forecasted to generate free cash flows of $23 million next year and $25 million the year after. After that, cash flows are projected to grow at a stable rate in perpetuity. The company's cost of capital is 8.4%. The company has $63 million in debt, $19 million of cash, and 15 million shares outstanding. Using an exit multiple for the company's free cash flows (EV/FCFF) of 16, what's your estimate of the company's stock price?

Expert Solution

Company stock price =$ 23.97

jeff jeffy answered 2 years ago

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