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Scampini Technologies is expected to generate $150 million in free cash flow next year, and FCF...

Scampini Technologies is expected to generate $150 million in free cash flow next year, and FCF is expected to grow at a constant rate of 7% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 12%. If Scampini has 60 million shares of stock outstanding, what is the stock's value per share? Round your answer to two decimal places.

Each share of common stock is worth $ , according to the corporate valuation model.

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Answer #1
Step-1:Calculate present value of Free Cash flow
Present Value of Free Cash flow = FCF1/(Ke-g) Where,
= 150/(12%-7%) FCF1 = $        150 million
= $       3,000 million Ke = 12%
g = 7%
Step-2:Calculate Value per share
Value per share = Total Value of firm/Total Number of shares
= $    3,000 million / 60 million
= $    50.00
Thus, According to corporate vauation model, each share of common stock is worth $ 50.00
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