1.A. A company is projected to generate free cash flows of $800 million per year for...

1.A. A company is projected to generate free cash flows of $800 million per year for the next 3 years (FCFF1, FCFF2 and FCFF3). Thereafter, the cash flows are expected to grow at a 1.5% rate in perpetuity. The company's cost of capital is 12.0%. The company owes $100 million to lenders and has $90 million in cash. If it has 150 million shares outstanding, what is your estimate for its stock price? Round to one decimal place

1.B. A company is projected to generate free cash flows of $500 million next year, growing at a 4.0% rate until the end of year 3. After that, cash flows are expected to grow at a stable rate of 3.0%. The company's cost of capital is 9.0%. The company owes $300 million to lenders and has $20 million in cash. If it has 200 million shares outstanding, what is your estimate for its stock price? Round to one decimal place.

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jeff jeffy answered 1 year ago

A company is projected to generate free cash flows of $100 million per year for the...

A company is projected to generate free cash flows of $100 million per year for the next 3 years (FCFF1, FCFF2 and FCFF3). Thereafter, the cash flows are expected to grow at a 3.0% rate in perpetuity. The company's cost of capital is 7.0%. What is your estimate for its enterprise value? Answer in millions, rounded to one decimal place (e.g., $213,456,789 = 213.5).

A company is projected to generate free cash flows of $164 million per year for the...

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