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You are valuing Soda City Inc. It has $107 million of debt, $87 million of cash,...

You are valuing Soda City Inc. It has $107 million of debt, $87 million of cash, and 157 million shares outstanding. You estimate its cost of capital is 12.3%. You forecast that it will generate revenues of $706 million and $794 million over the next two years, after which it will grow at a stable rate in perpetuity. Projected operating profit margin is 23%, tax rate is 29%, reinvestment rate is 26%, and terminal EV/FCFF exit multiple at the end of year 2 is 14. What is your estimate of its share price? Round to one decimal place.

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Expert Solution

Share Price = $8.5

Please upvote if satisfied

jeff jeffy answered 1 year ago
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