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SM Town Inc. estimates their future free cash flows as followed: Year 1: $25,000; Year 2:...

SM Town Inc. estimates their future free cash flows as followed: Year 1: $25,000; Year 2: $31,600; Year 3: $34,000. They expect a 5% growth rate beyond year 3 and the required rate of return is 13%.

18) What is their terminal value in Year 3 (V3)?

$446,250

$414,750

$378,990

$425,000

19.) What is a fair stock price per share of SM Town if they have $50,000 in debt and 3,500 shares outstanding?

$89.99

$80.84

$94.20

$87.96

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