CORPORATE VALUATION
Dantzler Corporation is a fast-growing supplier of office
products. Analysts project the following free cash flows (FCFs)
during the next 3 years, after which FCF is expected to grow at a
constant 7% rate. Dantzler's WACC is 14%.
| Year |
0 |
1 |
2 |
3 |
| ....... |
....... |
....... |
....... |
....... |
....... |
....... |
....... |
|
....... |
....... |
....... |
....... |
....... |
....... |
....... |
...... |
| FCF ($ millions) |
|
- $6 |
$29 |
$55 |
- What is Dantzler's horizon, or continuing, value?
(Hint: Find the value of all free cash flows beyond Year 3
discounted back to Year 3.) Round your answer to two decimal
places. Enter your answer in millions. For example, an answer of
$13,550,000 should be entered as 13.55.
$ ______ million
- What is the firm's value today? Round your answer to two
decimal places. Enter your answer in millions. For example, an
answer of $13,550,000 should be entered as 13.55. Do not round your
intermediate calculations.
$ ______ million
- Suppose Dantzler has $99 million of debt and 6 million shares
of stock outstanding. What is your estimate of the current price
per share? Round your answer to two decimal places. Write out your
answer completely. For example, 0.00025 million should be entered
as 250.
$ _______