A company is forecasted to generate free cash flows of $23 million next year and $28...

A company is forecasted to generate free cash flows of $23 million next year and $28 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 12.3%. The company has $61 million in debt, $13 million of cash, and 28 million shares outstanding. Using an exit multiple for the company's free cash flows (EV/FCFF) of 19, what's your estimate of the company's stock price?

a. 30.8
b. 26.8
c. 14.9
d. 10.6
e. 18.0

Expert Solution

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jeff jeffy answered 2 years ago

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