MBX is a new firm that will generate free cash flows of $100 billion in year...

MBX is a new firm that will generate free cash flows of $100 billion in year 1 and growing at a rate of 5% a year thereafter. If the MBX’ cost of capital is 10% and it has neither debt nor cash then by issuing 100 million shares the price of MBX stock will be:

a.
$200 per share

b.
$10 per share

c.
$20 per share

d.
$100 per share

Expert Solution

jeff jeffy answered 2 years ago

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