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A company is forecasted to generate free cash flows of $62 million for the next three...

A company is forecasted to generate free cash flows of $62 million for the next three years. After that, cash flows are projected to grow at a 2.9% annual rate in perpetuity. The company's cost of capital is 7.3%. The company has $77 million in debt, $11 million of cash, and 21 million shares outstanding. What's the value of each share?

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Answer #1
  • Value of company = $ 1335.515. Million
  • Value of shareholders fund = $ 1258.515 million
  • Value of each share. = $ 59.93
  • Cash is a part of shareholder fund so we don't deduct cash balance from shareholder fund.
  • Brief explanation given below.

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