Question

# 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?

#### Homework Answers

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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