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Calculate the per share value of Suzie Q's if the cumulative present value of horizon period...

Calculate the per share value of Suzie Q's if the cumulative present value of horizon period FCFF is $8,000, the present value of terminal period FCFF is $6,200, and the book value of net non-operating obligations (NNO) is $2,400. The company has 200 shares outstanding.

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Answer #1

Total Value of the firm

Total Value of the firm = Cumulative Present Value of the free cash flows + Present Value of Terminal Period cash flow

= $8,000 + $6,200

= $14,200

Value of Common Equity

Value of Common Equity = Total Value of the firm - Net non-operating obligations

= $14,200 - $2,400

= $11,800

Value per share of Suzie Q

Value per share = Value of common equity / Number of common shares outstanding

= $11,800 / 200 Common Shares Outstanding

= $59.00 per share

“Therefore, the per share value of Suzie Q will be $59.00 per share”

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