Question

Suppose Glead corporation’s projected free cash flow for next year is FCF1 = $150 million and...

Suppose Glead corporation’s projected free cash flow for next year is FCF1 = $150 million and FCF is expected to grow at a constant rate of 7.25%. If the company’s weighted average cost of capital is 10.5%, the value of debt is currently $200 million and the outstanding number of common stocks is 80 million, and there is no preferred stocks issued. Compute the value of this stock.

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