Question

Elon Musk’s Tesla Corp. (TSLA) has the following price per share, cash flows and, financial projections (these numbers are projections I threw together in about 15 minutes… so take them with a grain of salt).

- Since May of 2019 Tesla stock has increased form approximately $185 a share to $815 a share! $815 a share is the current price of Tesla stock.
- The company has 180,240,000 shares outstanding.
- The company’s future expected cashflows are:

Year 1: $3,000,000,000

Year 2 $3,800,000,000

Year 3: $5,000,000,000

Year 4 onward: Constant growth of 5% per year.

Assume a fair discount rate of 7%. What is the company’s fair price per share?

(Enter you answer round to the nearest penny, with no dollar signs or punctuation)

Answer #1

Elon Musk’s Tesla
Corp. (TSLA) has the following price per share, cash flows and,
financial projections (these numbers are projections I threw
together in about 15 minutes… so take them with a grain of
salt).
Since May of 2019 Tesla stock
has increased form approximately $185 a share to $815 a share! $815
a share is the current price of Tesla stock.
The company has 180,240,000
shares outstanding.
The company’s future expected
cashflows are:
Year 1:
$3,000,000,000
Year 2
$3,800,000,000...

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