Question

Frank Martin Bread Company is projected to generate free cash flows of $90 million per year for the next two years, after which it is projected grow at a steady rate in perpetuity. The company's cost of capital is 9%. It has $250 million of debt and $12 million in cash. There are 30 million shares outstanding. Comparable companies trade at an average EV/FCFF multiple of 9. Using the exit multiple method for terminal value and DCF for the rest, what is your estimate of its share price?

a) $16.1 |
||

b) $17.6 |
||

c) $19.1 |
||

d) $20.1 |
||

e) $21.1 |

Answer #1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

Frank Martin Bread Company is projected to generate free cash
flows of $90 million per year for the next two years, after which
it is projected grow at a steady rate in perpetuity. The company's
cost of capital is 7%. It has $250 million of debt and $12 million
in cash. There are 30 million shares outstanding. Comparable
companies trade at an average EV/FCFF multiple of 9. Using the exit
multiple method for terminal value and DCF for the rest,...

Frank Martin Bread Company is projected to generate free cash
flows of $90 million per year for the next two years, after which
it is projected grow at a steady rate in perpetuity. The company's
cost of capital is 11%. It has $250 million of debt and $12 million
in cash. There are 30 million shares outstanding. Comparable
companies trade at an average EV/FCFF multiple of 9. Using the exit
multiple method for terminal value and DCF for the rest,...

Frank Martin Bread Company is projected to generate free cash
flows of $90 million per year for the next two years, after which
it is projected grow at a steady rate in perpetuity. The company's
cost of capital is 11%. It has $250 million of debt and $12 million
in cash. There are 30 million shares outstanding. Comparable
companies trade at an average EV/FCFF multiple of 9. Using the exit
multiple method for terminal value and DCF for the rest,...

Frank Martin Bread Company is projected to generate free cash
flows of $90 million per year for the next two years, after which
it is projected grow at a steady rate in perpetuity. The company's
cost of capital is 7%. It has $250 million of debt and $12 million
in cash. There are 30 million shares outstanding. Comparable
companies trade at an average EV/FCFF multiple of 9. Using the exit
multiple method for terminal value and DCF for the rest,...

Question 12
Frank Martin Bread Company is projected to generate free cash
flows of $85 million per year for the next two years, after which
it is projected grow at a steady rate in perpetuity. The company's
cost of capital is 11%. It has $250 million of debt and $12 million
in cash. There are 30 million shares outstanding. Comparable
companies trade at an average EV/FCFF multiple of 9. Using the exit
multiple method for terminal value and DCF for...

9. Frank Martin Bread Company is projected to generate free cash
flows of $80 million per year for the next two years, after which
it is projected grow at a steady rate in perpetuity. The company's
cost of capital is 11%. It has $250 million of debt and $12 million
in cash. There are 30 million shares outstanding. Comparable
companies trade at an average EV/FCFF multiple of 9. Using the exit
multiple method for terminal value and DCF for the...

A company is projected to generate free cash flows of $85
million per year for the next two years, after which it is
projected grow at a steady rate in perpetuity. The company's cost
of capital is 11%. It has $250 million of debt and $12 million in
cash. There are 30 million shares outstanding. Comparable companies
trade at an average EV/FCFF multiple of 9. Using the exit multiple
method for terminal value and DCF for the rest, what is...

A company is projected to generate free cash flows of $46
million per year for the next two years, after which it is
projected grow at a steady rate in perpetuity. The company's cost
of capital is 11.6%. It has $23 million worth of debt and $7
million of cash. There are 13 million shares outstanding. If the
exit multiple for this company's free cash flows (EV/FCFF) is 14,
what's your estimate of the company's stock price? Round to one...

1. A company is projected to generate free cash flows of $159
million next year and $204 million at the end of year 2, after
which it is projected grow at a steady rate in perpetuity. The
company's cost of capital is 9.7%. It has $171 million worth of
debt and $51 million of cash. There are 27 million shares
outstanding. If the exit multiple for this company's free cash
flows (EV/FCFF) is 5.1, what's your estimate of the company's...

A company is projected to generate free cash flows of $150
million next year and $210 million at the end of year 2, after
which it is projected grow at a steady rate in perpetuity. The
company's cost of capital is 8.0%. It has $200 million worth of
debt and $40 million of cash. There are 30 million shares
outstanding. If the exit multiple for this company's free cash
flows (EV/FCFF) is 4.0, what's your estimate of the company's stock...

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